Reconfirming the Case for Structured Settlements

The Wall Street Journal published an article on June 12, 2020 highlighting a fundamental reason why structured settlements are more appropriate for many personal injury plaintiffs than alternative stock market investments. [Note: The Wall Street Journal requires a subscription for access to this article.]

Titled “‘Volatility Is Everywhere’: The Market Tactic That’s Driving Stocks Haywire” and written by Gunjan Banerji, the article explains that “[i]n recent years, [stock market] volatility has gone from a specialty of derivatives traders to a vehicle for trading in its own right.”

COVID-19, according to the article, has further exacerbated both volatility trading and stock market volatility as a result. “The pandemic has cemented its arrival, luring fresh cash and interest as stock swings jumped to new levels.”

The Wall Street Journal article quotes Paul Britton, founder of Capstone Investment Advisors LLC, one of the largest investment firms specializing in trading volatility: “I don’t think there’s ever been a time when there’s so much uncertainty. That is typically good for volatility practitioners. Uncertainty is our friend.”

Unlike Wall Street volatility traders, however, uncertainty is not the friend of most plaintiffs who are settling personal injury lawsuits. Most settlement recipients have likely never had to think about managing a large sum of money, especially not money that is intended to provide necessary medical care for the rest of their life.

Compared to the volatility of the stock market, a structured settlement annuity is one of the safest choices you can make with your money. Rather than you personally assuming the risks of investing and reinvesting your settlement dollars, a structured settlement allows you to transfer those risks to a life insurance company that will guarantee your future periodic payments.

Structured settlement annuity providers, like Independent Life, are required to make very prudent decisions in their investment portfolio. As a result, structured settlement annuities are mostly exempt from market fluctuations and volatility. So, while you won’t experience big investment gains, more importantly, you are protected against investment losses.

Many professional money managers are losing money in today’s uncertain investment environment including volatility traders. As the Wall Street Journal article points out: “[t]he recent stretch of market turbulence has been littered with soured volatility bets.”
A structured settlement, however, is more than just an investment. If you think about structured settlements as a financial preservation tool, and consider their many additional benefits, you begin to see their true value. Financial preservation is especially important during periods of economic uncertainty, especially in complex personal injury cases that require ongoing medical care for the rest of your life. Setting up a structured settlement guarantees you will receive funds for future monthly medical expenses and allows you to plan for any anticipated needs.

Here are some of the benefits offered by structured settlements:

    • Tax-free growth for qualified settlements
    • Flexible formatting allows customized plan tailored to individual needs
    • Ability to preserve government benefits such as SSI, Medicare and Medicaid
    • Stress-free investment because payments are guaranteed
    • Security of lifetime payments prevents complete depletion of assets
    • Ability to designate a beneficiary to receive remaining guaranteed payments
    • No investment fees or ongoing management costs
    • Option to have an annual cost of living adjustment
    • Protection from risk of excessive spending, bad investments, and volatile market conditions
    • Protection of future annuity payments from claims of creditors in most states
    • Medical underwriting could increase payment amounts of lifetime payments

Independent Life is the first annuity provider to focus exclusively on the structured settlement market to help personal injury victims and their families. We are solely dedicated to the structured settlement marketplace and our investments are specifically tailored to meet the needs of our structured settlement obligations. In addition to other structured settlement benefits:

    • Our unique Payee Protection Policy provides our structured settlement payees with security against unfair transfer petitions.
    • Our two-tier medical underwriting process offers superior analysis for catastrophically injured plaintiffs.
    • Our non-qualified product expands the types of cases that qualify for structured settlement annuities including those that are not personal injuries.

If you have not already done so, we encourage you to contact one of our agents to learn more about how a structured settlement can protect your settlement for life.