Structured Settlements: Catastrophic Injuries

Structured Settlements: Catastrophic Injuries

Third in a series of blog posts dedicated to helping clients decide when a structured settlement should be considered

Today’s Installment: Catastrophic Injuries

May 10, 2019 – While structured settlements are useful in resolving a wide variety of liability disputes, those involving catastrophic injuries are especially well-suited to this method of claims resolution.

When an accident leaves a person tragically impaired requiring health care and living assistance extending well into the future, there are several reasons a structured settlement should always be the first choice when negotiating and finalizing these lawsuits or claims.

Reason 1: Certainty

Unlike cash settlement funds invested in the stock market which may rise and fall with market conditions and can even lose value, structured settlement payments are fully guaranteed ensuring funds will be there when needed.

Tax-free with no management fees or expenses, structured settlements enhance the value of these types of settlements by matching future needs with future dollars, often crafted to track with a professionally prepared life care plan.

Sure, market investing can also increase the value of a settlement, but increased returns are only possible by assuming more risk. And a positive outcome is far from guaranteed.

“Risk cannot be a factor in my son’s recovery.”

Roger Greene, on why he chose a structured settlement for his son, Kyle, who suffered a spinal cord injury in a motor vehicle accident.

Creating a series of guaranteed cash flows to meet costs of known and anticipated future care allows the injured party and their family to focus on the patient’s recovery.

Backed by some of the world’s largest and most solvent life insurance companies in a highly regulated industry, structured settlements eliminate the risk of running out of funds for needed medical and attendant care.

Reason 2: The Rated Age Pricing Advantage

Because some accidents leave the survivor with injuries severe enough to compromise their normal life expectancy, life companies offering structured settlements are often able to offer improved pricing on lifetime payments.

By insuring large pools of individual policyholders, life companies can better manage longevity risk than an individual can on their own. Some in the pool will live longer than expected while some will die sooner. But because the life companies have so many individuals under contract, mortality risk for any individual is shared by members of the pool.

This pricing advantage can increase the rate of return on lifetime monthly payout for any given funding sum at no additional cost. Monthly benefits can increase by 5% to 20% or more depending on the medical records reviewed.

Among the types of injuries eligible for rated age consideration: Spinal cord injuries, traumatic brain injuries, burns, lacerated organs, heart conditions, and other conditions even if unrelated to the accident such as hypertension, obesity, drug or alcohol dependency, etc.

Reason 3: Lifetime Security

When injuries require care for a lifetime, safeguarding settlement funds for as long as the individual lives becomes a paramount concern.

A life annuity structured settlement option can match future needs with future dollars safely and more effectively than any alternative investment strategy.

And it’s also a bargain! Compared to other options, especially when combined with their tax-free nature and fixed payout, nothing compares to a structured settlement.

“To achieve a similar riskless guarantee of income throughout one’s uncertain lifetime without life annuities would cost between 25% and 40% more.”

Rational Decumulation, David F. Babbel, Craig B. Merrill

Those with debilitating injuries often require care beyond the lives of their primary care givers. A structured settlement can establish a pattern of predictable funds to meet future life care needs.

When safety, security, superior comparative returns, and guaranteed lifetime income are goals, a structured settlement should always be a primary consideration for those involved in catastrophic injury lawsuits and claims.

For further information, be sure to check out this brochure from the National Structured Settlements Trade Association (

Structured Settlements: The Key to a Successful Financial Strategy

Photo by JAFAR AHMED on Unsplash


Finn Financial Group