According to a recent report, the total amount of structured settlement annuity premiums in the U.S. decreased by 10 percent in 2011 compared to the previous year, and has dropped approximately 20 percent since 2008. Specifically, in 2011 annuity premiums totaled $4,974,710,838, down from $6,226,578,725 in 2008, according to a report by Structured Financial Associates, Inc. This represents a big shift in the way plaintiffs are handling their money post-settlement. Are they making more diverse investment choices? Choosing lump sums? In today’s economy, we are seeing both.
The low interest rate attributed to annuities today could be moving plaintiffs to seek alternative investment options, but certainly nothing offers the long-term financial security of a structured settlement. The best plan takes into account both foreseeable and unforeseeable needs. Certainly any and all future medical needs must be planned for, and expenses such as education, housing, etc. must be taken into account. The bottom line is that both plaintiffs’ attorneys and structured settlement consultants must keep the client’s best interest in mind. A well-crafted plan with appropriate growth and some flexibility will better withstand the changing economy and needs of the plaintiff.
Hank Didier is co-founder of Vantage Capital Consultants, a purchaser of structured settlements and annuities formed by plaintiffs' attorneys to help plaintiffs through a fair and consultative approach.