Annuities

Although there are infinite payment options from a structured settlement annuity, for purposes of comparing them with investment alternatives, there are two major types:

Certain Annuities

These are annuities that make one or more defined future payments. Such annuities might provide a limited number of lump sum payments — for example, four annual amounts for college and two additional payments at ages 25 and 30. Alternatively, the annuity might provide a series of monthly payments, such as 20 years of monthly payments.

It is easy to compare the type of returns provided by certain annuities to various investment alternatives by clicking here.

Life Annuities

These annuities add a powerful insurance feature by providing payments for life. The security of lifetime (or life-long) income is a valuable benefit. It is more difficult to value precisely in comparison to investment alternatives that cannot provide life-time benefits. In general, we approach this comparison by determining the probability that a claimant will prematurely deplete the resources by investing the settlement dollars instead of accepting a structured settlement. Click here to see this analysis.