In today’s economic climate where the markets seem unable to find their financial footing, it’s good to know that structured annuities offer a safe haven to place personal injury settlement funds.
A rundown of benefits:
- A lifetime structured settlement annuity is much like a pension plan or Social Security benefit (the ultimate annuity)—pay into it and receive a lifetime of guaranteed payments.
- Funds are scheduled and automatically deposited. Set payments are made regardless of inevitable stock and bond market corrections—giving claimants peace of mind even in the most dire economic times.
- For personal injury plaintiffs, money not only grows tax-free while in the annuity, but also is not subject to taxation when withdrawn.
- The real return on a structured settlement annuity is similar to a comparable taxable investment. This is particularly true in California where state taxes are high.
- A guaranteed amount of the annuity payout can be passed down to beneficiaries if the injured party dies.
- Only highly rated insurance companies are selected for structured settlement annuities. These companies are regulated by state insurance agencies and all annuity reserves must have assets that are equal to or exceed the corresponding payment obligations.
Although annuity payments can increase based on the inflation rate, injured parties may still worry that their payments may not be enough to keep up with expenses or cover unexpected bills. Once the annuity schedule is set, it can’t be changed.
Understanding how structures work, the various payment options as well as restrictions is critical before injured parties can decide whether a structured settlement plan is right for them.
Feel free to call or email anytime with questions.
–Pat
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