The Settlement Alliance

Do Structured Settlements Make Sense for Claimants of Every Age?

Do Structured Settlements Make Sense for Claimants of Every Age?

Sep 12, 2016

Our team works with clients of varying ages, from young children to adults who are well into retirement. A common thread that we have found across all ages is the need for financial stability. When a loved one is injured, the financial strain of ongoing medical costs and lost income adds pressure to an already overwhelming situation. One of the best ways to implement financial stability—for injured individuals of every age—is to utilize a structured settlement.

What is a Structured Settlement?

A structured settlement uses an annuity to provide the injured individual with periodic payments. Instead of paying the settlement directly to the injured person as a lump sum, the defense/insurance company places a portion or all of the settlement funds into the annuity. The payout schedule can be designed to accommodate the unique needs of the injured person, with options for monthly, quarterly, semi-annual, or annual payments, and the ability to designate lump sum payments if needed. The investment growth on the funds is 100% income tax-free, the rate of return is guaranteed, and there are no ongoing fees or expenses.

The question is—is it reasonable to think that a structured settlement will benefit minors, working-age adults, and elderly adults? Absolutely. Because the design of the payment stream is so flexible, a structured settlement plan is a practical financial tool for claimants of all ages. Here’s how:

Structured Settlements for Minors:

An injury to a minor creates a daunting situation for the minor’s family. A structured settlement helps remove financial pressure so that the family has the ability to focus on the child’s well-being. If there are immediate day-to-day needs, the proceeds can be paid directly into a trust. If the money will not be needed until the future, a structured settlement can be arranged to begin when the minor reaches the age of majority, setting aside income (with tax-free growth) to pay for college or a home purchase. Structured settlements for minors are typically favored by the courts, as their conservative nature offers security for the minor that stretches into adulthood.

Structured Settlements for Adults in Their 20s and 30s:

The priorities for a young adult are different than those of a minor. A structured settlement allows a claimant in their 20s or 30s to cover daily expenses, supplement income, or replace lost income, if needed. If daily expenses are not a concern, a structured settlement can be used as a financial tool for longer-term needs. For instance, the claimant may want to put money away to purchase a home or fund retirement. If the claimant has debt—student loans, car loans, credit cards—a structured settlement offers the flexibility to arrange for a lump sum payment, with the rest of the funds being paid out periodically.

Structured Settlements for Adults in Their 40s and 50s:

By their 40s and 50s, many adults have grown children of their own, but are still of working age themselves. Those who are injured or have lifelong medical needs may use a structured settlement to replace lost income and fund retirement. Lump sum payments can be arranged to pay for the claimant’s children to go to college, including room and board.

Structured Settlements for Adults in Their 60s and Up:

For an adult who is near or at retirement age, an injury or illness risks derailing one of the most important chapters of their life. A structured settlement may help alleviate financial burdens, allowing the claimant to fully fund retirement. It also helps cover assisted living and healthcare costs, and if paid into a special needs trust, may help the claimant maintain eligibility for government benefits.

Whether your client is 10, 30, or 70 years old, a structured settlement should be explored as a potential vehicle to manage their settlement proceeds. Our team is one of the largest structured settlement producers in the nation, and we are ready to walk your client and their family through their options for settlement. For more information, contact us today at 800-464-2500.

We are proud to partner with the highest rated structured settlement providers in the industry:

  • American general Life Companies
  • Berkshire Hathaway Structured Settlements
  • MetLife
  • Mutual of Omaha
  • New York Life
  • Pacific Life
  • Prudential