Two Case Studies: When a Structured Settlement May Make Sense

Structured settlement annuities can be used in a variety of situations. In this article, we’ll highlight two case studies of instances where a structured settlement annuity made a lot of sense.

Minor Clients

A common personal injury situation is when a minor has been involved in some type of accident (e.g., a dog bite or an auto accident). The minor might be receiving a significant settlement amount, and the parents don’t want that child to receive all of those funds at age 18. 

We can set up a structured settlement annuity that pays annual, monthly, or semesterly payments starting at 18 years old, effectively giving them a college fund. This is a common and typical use for a structured settlement.

Elderly Clients

Another situation where a structured settlement annuity makes sense is for elderly clients with fixed incomes. If the clients are conservative investors and they don’t want to take risks in investing those funds in the stock market, often a structured settlement annuity is a great option.

In these situations, we can set up a lifetime annuity, and all or a portion of the funds from the settlement will go into the annuity. The elderly client (and if desired, the client’s spouse) will never outlive that money. If they live beyond 100 years old, the annuity will still keep paying them. 

This lifetime annuity supplements their Social Security Retirement income, gives them a little bit more freedom each month to do the things they want to do, and provides peace of mind knowing they will never outlive their money.

Final Thoughts

Minor clients and elderly clients are two classic examples of when a structured settlement annuity may be an excellent option. 

If you have a client in one of these situations, it’s worth exploring whether a structured settlement annuity makes sense. Give us a call, we’d be happy to talk you through it.

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