Annuities
Life annuities
With a life annuity there is no risk of outliving the settlement: the payments continue for as long as they are needed.
Lifetime security
Income for as long as you live
Whether a claimant has a normal or a medically adjusted life expectancy, a diversified portfolio of stocks and bonds may run out before then if it pays out as much as an annuity of similar cost.
Few claimants can afford the combined risk of uncertain, taxable returns and a longer life than expected. A structured settlement annuity removes that risk with guaranteed income for life.
Pricing
Rated ages can raise the payments
Life insurers price structured settlement annuities on mortality assumptions that are more favorable than those for ordinary retirement annuities.
Claimants with medical conditions that may shorten their lives are medically underwritten. The insurer uses a reduced life expectancy, or "rated age", to calculate the payments, which can significantly increase what a given settlement amount pays out.
Investment returns
Most investors earn less than the market
When we forecast portfolio returns, we assume a claimant invests rationally, in a low-cost, diversified portfolio, and earns market returns. In practice few do. Research by Dalbar, Inc. has found that over a 30-year period the average investor earned 3.66% a year while the S&P 500 rose 10.35% a year.
Most claimants are unlikely to match average returns, especially after fees and costs. Experience shows that most lump sum awards are spent long before the claimant's financial needs end.
Talk with our brokers about your case
No pressure and no jargon. A short conversation is often the clearest way to see your options.