McKellar Structured Settlements Inc.About Structured Settlements
About Structured Settlements
Being involved in settlement discussions about your personal injury or accident benefits claim brings some important choices that will affect your future, and that of your family. The decision about whether or not a structured settlement ("structure") will form part of your settlement will be easier if you understand the benefits of a tax-free structure.
Let the McKellar team of professionals assist you with your structured settlement questions. Call us toll-free at 1.800.265.8381, or click here to contact us.
What is a Lump-Sum Settlement?
A lump-sum settlement is a one-time, cash payment to compensate you for financial losses, and for pain and suffering. Since the lump sum is for personal injuries, Canada Revenue Agency (CRA) does not consider it taxable. Once you receive this payment, you invest it yourself to try to produce the funds you need over your lifetime.
Important!
You do pay tax on any earnings from the money once it is invested.
What is a Structured Settlement?
Unlike the lump sum, a structured settlement pays you more money over a period of time that you choose, instead of all at once. In fact, it is an annuity with almost unlimited possibilities as to its form. A structure is created when a casualty insurer purchases an annuity from a federally-registered Canadian life insurer. This life insurer guarantees to provide you with periodic payments for a specified period. Each payment you receive is a combination of capital (some of the invested money) and interest (some of the life insurer’s money), all of which you receive tax free. You decide what you need and when – the choice is yours.
Important!
Once your structured settlement is in place, it cannot be changed or cashed in.
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