Since the horrific attacks of 9/11, through the dot-com bubble, the sub-prime crash of 2008, and now the devastation from Covid-19, Americans have endured multiple financial meltdowns, massive layoffs, wild stock market rides and what seems like constant financial uncertainty. And this is just within the last 20 years. These unsettling economic times have taken a toll on our financial and emotional well-being. One segment of the American population has been especially vulnerable to volatility: the victims of catastrophic personal injury claims. We call them “unique investors.”
They are unique investors because they are living with life-altering injuries, sometimes physical, sometimes emotional, often both. They depend on a steady stream of income to replace lost wages, pay for monthly bills and fund a lifetime of medical expenses. They need a means of financial support that carries no risk and is not subject to the rise and fall of the markets. They need to sleep at night, knowing their money will be there in the morning.
These unique investors need a secure, customized plan that begins with the long-term stability of a structured settlement.
During the financial meltdown of 2008, clients were calling in a panic. The stock market was suffering staggering losses. Wall Street giants like Lehman Brothers were collapsing and 401K balances were plummeting. Uncertainty overwhelmed the financial world. Clients were petrified about losing their primary sources of income.
Again in 2020, we’re fielding calls from anxious clients wondering if their monthly annuity checks would still be coming. The financial markets were crashing again, family businesses were closing, unemployment was rampant, as the effects of Covid-19 loomed—and continue to loom—over the entire country.
During both of these financial crises, we were able to provide assurance, stability and peace of mind. Thanks to the security of tax-free structures, checks kept coming in the exact amounts prescribed and according to their normal scheduled dates. They will continue to arrive long after this crisis is over…and before the next one begins.
Unique Investors Need Stability
After a personal injury case is settled, the negotiations end and the final settlement amount is agreed upon. Yet some big questions remain. Should claimants take settlement funds and invest them in the marketplace? Should they seek out higher returns to increase account balances? Should they try to preserve the money they have? Should they try to match their future medical and income need to a steady stream of tax-free guaranteed income? For unique investors, the victims of personal injury, the answer is clear.
Various industry studies compellingly show that a significant amount of personal injury settlement funds dissipates quickly. These losses are due to lack of planning, unwise investments, frivolous spending, major market crashes, pandemics, as well as bad luck. This is where structured settlements are game-changers. They bring no risk, no decline in payments, no taxes and no worry.
Refocusing for the Future
We understand that living with a catastrophic injury means that unique investors are forced to make tough monetary decisions. Working with a financial advisor is helpful, but only when the advisor has experience guiding their unique types of circumstances and understands how to plan for all the myriad of contingencies that personal injury can create.
Pre-injury, financial planning was all about daily life, making ends meet, saving for college tuitions, or the hopeful accumulation of some reserve for retirement, vacations and travel. Post-injury settlement, the focus shifts to the preservation of capital to live on, pay for medical expenses and supplement lost income.
Preservation is crucial, especially in uncertain economic times. Losing a significant portion of settlement funds to all the risks we’ve discussed is a loss no injured party can afford. Settlements are one-shot opportunities. There is no do-over.
Every personal injury victim is a unique investor who requires a comprehensive and fully customized plan to meet specific future needs and life events. Structured settlement annuities are elegantly designed for this purpose. They guarantee steady, tax-free income and provide calm in the most volatile times.