Claimants who will be receiving settlement awards may have questions and concerns about their finances and the well-being of their families. Whether a claimant is just starting out in life, is an adult with a family of their own, or has been retired for years, each has a unique set of needs. Utilizing a carefully planned and executed structured settlement annuity is one of the best ways for a claimant of any age to protect their financial future.
What is a Structured Settlement?
A structured settlement uses an annuity to break down a settlement award into a series of periodic payments. The schedule is very flexible in nature—claimants can opt to receive monthly, quarterly, semi-annual or annual payments, and can even include future lump sum payments. The payments and any interest growth are 100% income tax-free, the rate of return is guaranteed1, and there are no ongoing fees or expenses. A claimant can place all or a portion of their settlement proceeds in a structured annuity, but the decision must be made prior to finalizing the settlement.
Structured settlements can be designed to benefit claimants of any age. Here’s how:
A structured settlement can help a family focus on the health and well-being of a minor by alleviating some of their financial concerns. In fact, due to their conservative nature, structured settlements are often favored by the court system when dealing with minors’ settlements. Even if a child has extensive injuries and needs day-to-day care, the structured settlement can be used to fund a trust, which then distributes funds for ongoing medical needs. If the proceeds aren’t needed right away, the structured settlement can begin making payments when the claimant reaches the age of majority. The payments can be made regularly or in the form of a few larger lump sums to pay for anticipated expenses such as college tuition or the purchase of a home.
Structured Settlements for Adults in their 20s and 30s
Young adults have different priorities than minors, and as such, a structured settlement for an adult in their 20s or 30s will be designed differently. After a settlement, a young adult may need monthly payments to supplement their income or to cover ongoing medical expenses. On the other hand, if there are no immediate needs, a young adult may want to focus on the future by structuring to include funds for a home purchase or to start planning for retirement. Another option may be to use a lump sum in the near future to pay off debts such as school loans, credit cards, car loans, or medical expenses.
Structured Settlements for Adults in Their 40s and 50s
Because most adults in their 40s and 50s have not yet retired, a structured settlement would likely be used to supplement their income or to fund upcoming retirement. If the claimant still has children at home, lump sum payments may be added to the agreement to help fund college tuition.
Structured Settlements for Adults in Their 60s, 70s, and Beyond
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. For this age group, a structured settlement can be used to fund retirement, to help cover healthcare, or to provide funds for assisted living. If the claimant is receiving government benefits, a pooled special needs trust may be used in conjunction with the structured settlement to help maintain their eligibility after settlement. Above all, using a structured settlement at this age protects the claimant from outliving their income.
Contact our Structured Settlement Experts to Learn More
Regardless of a claimant’s age, a structured settlement should be considered as an option for protecting their financial future. Our experienced team has worked with everyone from small children to elderly adults to develop comprehensive settlement plans. For more information, contact us today at 800-354-2258 or at firstname.lastname@example.org.
1 Guarantees are subject to the claims-paying abilities of the issuing insurance agency.