Structured settlements: Don’t be fooled by a catchy TV jingle

Structured settlements: Don’t be fooled by a catchy TV jingle

2019-04-04 05:00:00

If you use the words & # 39; structured settlement & # 39; hear, those late TV ads come to mind, don't they? You know the ones – from companies that promise you your money "now!" if you have received a personal injury claim.

Debunking that myth is one of Michelle Caine's main goals as she takes over the chairmanship of the 35-year-old National Structured Settlements Trade Association. In fact, the director of Prudential Retirement's structured settlements group wants to not only teach people what structured settlements really are, but she also wants to explain why the company has become one of the largest players in the market since it first came there. 30 years ago in.

“When you hear people's stories – everything they went through with their traumatic injury – and see how valuable the settlement is to them and how it has helped them move forward, you can look in the mirror and say, & # 39; I just did a good job today. & # 39; & # 39;

Michelle Caine

"If you go on the internet today and try to figure out what a structured settlement is, you're going to find more information about how to get out than information to educate you about what it is," Caine says. “I want to focus more on education and awareness of our product. We've been reactive for so long and I think we're in a position to be more proactive at Prudential and as an industry. "

To make things right, a structured settlement uses an annuity that pays out a reward for personal injury over time. Why should people consider structuring these prices? Tax benefits for one thing. They are generally tax free, as are the investment gains on the assets in the annuity. While lump-sum payments are also tax-free, investment gains are not on them. But more importantly, structured annuities can help keep people from overspending. How many times have you read about a lottery winner who went broke a few years after winning?

"It's the same for a lot of people who win big bodily injury settlements," says Caine. "They suddenly have an influx of money, they don't know how to deal with it and they have all kinds of people holding out their hands saying, 'let me help you'. And suddenly the money is not there. expenses, living expenses and other things they need. "

One person who knows firsthand the benefits of such a settlement is Kim. She was injured in a car accident. During the treatment, she responded to her medication and lost her vision. She filed a claim and received damages, which she structured through Prudential. And just a month later, her husband lost his job. But structured payments helped them keep a roof over their heads, pay their bills, and get the care they needed.

More than $ 250 billion is awarded in personal injury lawsuits every year, Caine says. Only $ 4 billion to $ 6 billion of that1 is structured, meaning that plaintiffs, the people who receive these awards, choose to pay their settlements periodically. The rest is paid in one go. And of the fraction canceled in 2018, Prudential was the fourth largest player in the market, competing with Berkshire Hathaway, Pacific Life and MetLife, among others.

Here's How It Works: Prudential and other companies partner with brokers who inform attorneys, judges, adjusters and others about the availability of structured settlements. When settlements are awarded, it is usually the plaintiff's attorneys who help individuals become aware that structured payments are an option.

“It's very important for us to reach out to those influencers, as they are the ones who educate their customers about the benefits,” says Caine. "The more people are aware of it, the more it will trickle down."

If someone decides to structure their settlement, they work with a broker to determine their needs. A payment plan is then funded with an annuity from Prudential.

Caine, who started her career as a lawyer, finds the structured settlement industry much more rewarding.

“When you hear people's stories – everything they went through with their traumatic injury – and see how valuable the settlement is to them and how it has helped them move forward, you can look in the mirror and say, & # 39; I just did a good job today. & # 39; & # 39;

For media information, please contact Gregory Roth

Finance