The Finn Blog

Structured Settlements for Employment Disputes

New Brochure Added

Liberty Life Assurance Company of Boston’s

Structured Settlements for Employment Disputes

November 4, 2015 – An article published in the National Law Review a little more than a year ago couldn’t be more straightforward:

“Employment Related Lawsuits Are on the Rise. Are You Covered?”

Expendable Employee

While we strongly encourage all businesses with employees to review their Employment Practices Liability Insurance (EPLI) coverage as advocated in the article to ensure they are properly protected should an employment-based lawsuit arise, our firm’s focus lies elsewhere.

We exist to help clients during the claims resolution process when a lawsuit is filed.

That’s when we can help!

While traditional structured settlements are vital in helping resolve a wide variety of claims involving personal, physical injury, the vast majority of employment disputes stem from alleged wrongs that are non-physical in nature.

As such, most employment settlement proceeds are taxable to the litigant.

Fortunately, a structured settlement can still be part of the solution. It’s just a slightly different type of structured settlement. One we’ve worked hard to educate the claims and legal communities on for years:

A Non-Physical Injury Structured Settlement

We believe so strongly in the value of this settlement option, we’ve created a companion Website,, dedicated to helping clients understand how and why this option works so well.

At the time of this writing, Liberty Life Assurance Company of Boston is the only life insurance company offering a non-qualified assignment to parties seeking to resolve their employment-based lawsuits. The brochure we’ve included on our Website highlights the tax advantages, its applications and describes the mechanics of the process.

Worth mentioning is the value of this tool for both the plaintiff and defense. Since income spread out over time generally will result in fewer total taxes being paid by the plaintiff, a case whose resolution may otherwise stall during mediation or post-verdict discussions because of adverse tax consequences can more easily resolve to the satisfaction of both sides.

I hope you find this brochure helpful and invite you to call anytime you have questions regarding structured settlements for employment-based litigation.

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Market-Linked Structured Settlement News

From Our Newsletter:

New Brochure Added

Pacific Life’s Index-Linked Annuity Payment Adjustment Rider

Blending Traditional and Market-Linked
Structured Settlements for the Best of Both Worlds

October 20, 2015 – We’ll keep this newsletter short since we hope you’ll spend most of your time reading the latest brochure we just received from one of our structured settlement life company partners.

Stock MarketYou may recall our April, 2014 newsletter telling you about the then-newest entrant into the structured settlement marketplace – a structured settlement featuring a rider that allows the recipient to benefit from some of the market upswings when they occur but, unlike being invested directly in the market itself, guarantees no loss of value when the market falls.

Then, in one of our September, 2014 blog posts, we told you the IRS had weighed in on the subject when it issued a favorable Private Letter Ruling on the idea.

Now, in an effort to advance understanding and appreciation of the concept, the current brochure we’re sharing today takes a look back over the past 30 years to see what might have been in a hypothetical situation. While past performance of the stock market is never a guarantee of future performance, such an exercise is common and can be quite helpful when making decisions today about tomorrow.

Isaac Newton surely would be confused by Pacific Life’s structured settlement offering since, unlike his “what goes up must come down” adage, structured settlements with an ILAPA Rider can only go up.

We’re pretty bullish on this option for our clients, especially those who suffer from FOMO (“Fear Of Missing Out” on market potential) and might otherwise pass on the opportunity to structure their settlement altogether.

So next time you’re in the market for a structured settlement, don’t forget to ask about the one with stock market potential.


This option works great for Structured Attorney Fees also!

I look forward to answering any questions you have on this or any related subject and hope you find the brochure helpful.

Stock market image courtesy of cooldesign at 

2015 Interest Rates Survey

September 28, 2015 – If you’ve been sitting around waiting for interest rates to rise in a meaningful way sometime soon, a recent report from the Executive Office of the President of the United States might give you an unhappy pause.

Not that a reading of “Long-Term Interest Rates: A Survey,” published July, 2015, predicts anything catastrophic. It simply lays bare a few realities that many people have spent a lot of time trying hard not to accept.

Briefly summarized, the survey reveals:

Rates have been on a long, steady decline for more than a generation.

Nobody really saw this coming.

It’s happening everywhere, not just the United States.

This could be permanent (or close to it).

Experts were wrong before and they’re probably going to be wrong again.

Rates probably aren’t heading too far north anytime soon.

Since a projection of long term interest rates is an important component in developing any Administration’s Presidential budget, this sobering news underscores the importance of setting realistic expectations.

Speaking of Realistic Expectations

HistoricalLongTermInterestRatesIf you’ve been resisting making long term financial commitments with your money out of fear you’d end up with some kind of buyer’s remorse if rates improve dramatically, maybe this survey will reduce your anxiety.

True, it’s not an ultra-rosy projection; however, maybe by tempering your expectations, you can move forward with confidence that you’ll be locking into something that is as good as you can get in the near term.

Structured settlements, with the added benefit of paying cash flows that are income tax-free (physical injury) or tax-deferred (non-physical injury, including attorney fees), remain a preferred settlement alternative despite the persistent “low” interest rate cautions.

Same with retirement annuities. Once you accept that security backed instruments are likely to remain close to status quo for much of the next generation, your incentive to hoard cash lessens.

Nobody wants to buy a TV set the day before it goes on sale. Maybe knowing there won’t be any “sale” on interest rates in the foreseeable future will allow you to move forward more confidently to secure your own future.

When You’re Sixty-Four

GuitarSeptember 14, 2015 – Even some of the staunchest Beatles fans are surprised to learn that one catchy tune from the Sgt. Pepper’s Lonely Hearts Club Band album about reaching a certain age was one of the first songs Paul McCartney ever wrote, by some accounts as early as age 16 when the band was still calling itself The Quarrymen.

Give “the cute Beatle” points for looking almost fifty years into the future to ponder love, life and, even if he was doing so unintentionally, joint life expectancy.

Today, married couples probably don’t think enough about joint life expectancy but if they want to make sure their retirement assets last as long as they do, they should.

Fortunately, one “band” that calls itself the Society of Actuaries (SOA) thinks about this kind of thing a lot. These studious lads (and lasses) may never have charted any singles but the work they do is as vital to life as music, if not more so.

In its Phase 1 (of a four-phase project) Baseline July, 2015 research newsletter on “Optimal Retirement Income Solutions in DC Plans,” the SOA authors analyze various retirement income generators (RIGs) with the goal of evaluating the pros and cons of each method to find the optimum solution for ensuring steady cash flow for life.

(Full Disclosure: One of the authors, Dr. Wade Pfau, was one of my professors during my Retirement Income Certified Professional® studies through The American College)

Quotable Highlights

This report is YET ANOTHER in a series of studies we keep finding that points to the advantage of life annuities to meet one’s future income needs.

Here are a few of the highlights we especially liked with our own emphasis added:

“RIGs that pool longevity risk (annuities) provide higher expected lifetime retirement income than investing approaches that self-fund longevity risk.” (p. 8)

“An effective compromise may be retirement income solutions that dedicate a portion of savings to annuities and remaining assets to investing solutions to realize the advantages of both.” (p. 9)

(NOTE: Check out some of our recent newsletters and blog posts. We’ve been advocating this approach for years.)

“Traditional annuities produce higher expected average retirement income than SWP (Standard Withdrawal Plan) strategies due to longevity pooling.” (p. 12)

This last one is worth analyzing a bit further.

The classic “four percent” draw down approach (a common SWP where retirement assets are invested in a mix of stocks and bonds and retirees withdraw four percent of the principal each year to live on hoping what remains will earn enough to allow the money to last a lifetime) has recently been called into question.

So much so than this SOA paper didn’t even consider this approach as an option since prior research “showed this method failed (savings were exhausted) in unfavorable investment scenarios.” (p.14)

    Translation: The four percent thing works great when it works. But it doesn’t always work.

Saving the best part of the report for last, it doesn’t get any more straightforward than what the authors concluded about single premium immediate annuities (SPIAs) for a hypothetical sixty-five year old female with $250,000 in retirement assets:

“SPIAs produce highest income with lowest risk” (p. 23)

You’ll Be Older, Too

For married couples, the case for annuities is even more compelling.

Everyone has a statistical probability of living to a certain age. But when that same person marries, the chance that one of them will live beyond their individual life expectancy increases by a significant factor.

NOTE: This calculus also extends to same-sex married couples by the way though it is unknown to what extent outcomes might vary. Additional research is needed.

If continuation of cash flow to a surviving spouse is important to ANY married couple, placing value on these statistical probabilities should be a top priority.

Here’s a quick look at how this plays out for a sixty-four year old married (male, female) couple courtesy of our bean-counting friends at the SOA (individual chances in parentheses):

72% chance one of them will live to age 85 (Man: 41%, Woman: 52%)
45% chance one of them will live to age 90 (Man: 19%, Woman: 31%)

18% chance one of them will live to age 95 (Man: 6%, Woman: 18%)

If want to see what YOUR OWN chances of living to a certain age will be, Vanguard has a nifty interactive “Plan for a long retirement” tool you might like. It’s a fun (and possibly frightening) exercise.

So whether you’re trying to decide what to do with an anticipated personal injury settlement, a larger-than-usual attorney fee or the current 401(k) balance you’ve managed to accumulate during your working life, I hope this information on life expectancy has given you something to think about.

Guitar image courtesy of Iamnee at

EBRI Conclusion: Annuities = Good

September 10, 2015 – Despite ongoing efforts by many in the financial planning community-at-large to downplay the importance of annuities in helping people address their retirement financing challenges, unbiased research keeps surfacing, leading astute retirees and retirees-to-be to the exact opposite conclusion:

Retirement annuities can be very, very good for you!

Today, I’m pleased to share the following article from the August, 2015 issue of EBRI Notes, a publication of the Employee Benefit Research Institute (EBRI):

“How Much Can Qualifying Longevity Annuity Contracts Improve Retirement Security?”

RetireeThe article discusses modeling techniques used to assess the retirement readiness and ultimately security for Baby Boomers and Gen Xers.  In light of the ongoing perception that “interest rates are too low” for annuities, we found this particular finding noteworthy:

“. . . even at today’s historically low interest rates, the transfer of longevity risk provides a significant increase in retirement readiness . . .”

EBRI is a nonprofit, nonpartisan organization which exists to provide “credible, reliable, and objective research, data and analysis” and counts among its members a cross section of some of the most recognizable names in the American financial, investment, employment, education, legal, accounting, insurance and labor organization landscape.

One of the worst things that can happen to a person after a lifetime of working and saving for retirement is to find themselves in a position where they run out of money.

It’s an individual problem, to be sure.

But it’s also a problem for society as a whole hence the interest in the subject by EBRI.

Annuities, especially longevity annuities, help offset the risk of running out of money at an advanced age in one of the most cost-efficient manners possible. The mortality risk transfer that occurs when people buy annuities en masse simply cannot be replicated as effectively by individuals following traditional investing strategies.

Traditional investing and annuity ownership need not be mutually exclusive by the way. For most people, an ideal retirement plan would likely include elements of both with the only variable being a matter of percentage allocation to each discipline.

Image courtesy of stockimages at

Structured Settlement Usage Improves in 2015

September 3, 2015 – Of the nine categories of fixed annuities tracked by LIMRA Secure Retirement Institute, only one has shown a positive trend over 2014: Structured Settlements.


An estimated 46.2 billion dollars’ worth of fixed annuity contracts were issued through the half-way point of 2015 and the data reveal that structured settlements are up 8% adding $200,000,000 over the previous year’s activity.

LIMRA Secure Retirement Institute estimates place structured settlement activity at $2.8 billion through June of 2015.

While our firm can’t take full responsibility for this improvement (we’re up about 41% YTD over 2014), I’m proud to say the decisions our clients are making have contributed to this positive trend.

Tax-advantaged, guaranteed structured settlement payments exist to help those challenged by the aftereffects of a personal injury settlement.

Many of them can no longer return to their regular careers.

Often they’re dealing with the severe emotional and financial devastation that accompanies the death of a family member.

Others face the uncertainty of ongoing medical and support needs.

Some seek tax efficiency impossible to achieve elsewhere.

In our view, it only makes sense those who require stability choose safety and security over uncertainty and volatility.

While structured settlement annuity activity represents only about 6.1 percent of the total fixed annuity market, it’s perhaps the most essential percentage since these annuities are funded not with disposable income dollars but rather dollars intended restore individuals to their pre-accident condition.

Structured settlements have been helping people for going on half a century and we’re proud to provide such a valuable life stabilizing service to those who need it most.

Image courtesy of Stuart Miles at

Mastering Structured Settlements

August 18, 2015 – In furtherance of our ongoing commitment to do our absolute best to help clients navigate the complex and often daunting personal injury pre-and-post-settlement resolution process, I’m proud to announce today that I am officially among the first in the country who can formally lay claim to the title:

Master’s Certified Structured Settlement Consultant


First Graduating Class

Last fall, I was part of the inaugural class of structured settlement industry professionals who began formal studies on the beautiful campus of The University of Notre Dame as part of the National Structured Settlements Trade Association’s (NSSTA) advanced structured settlement certification offering.

The Master’s Certified Structured Settlement Consultant (MSSC) designation, developed in cooperation with Notre Dame’s prestigious Mendoza College of Business, builds on the Certified Structured Settlement Consultant (CSSC) designation NSSTA initiated more than two decades ago, a designation I earned in 1995.

The MSSC curriculum included a host of topics designed to enhance students’ understanding of the issues facing our industry that we may better serve our clients. I highlighted some of the faculty and subject matter covered in my Master Class Highlights blog post last October.

The capstone of the learning experience was the submission of a peer-reviewed research paper. For my thesis, I chose the wordy yet unambiguously titled . . .

“Non-Physical Injury Structured Settlements:

A Solution To The Fairness Imbalance Created When Taxable Damage Personal Injury Claims Settle For Cash Lump Sums.”

My research paper is currently being considered for publication in an industry periodical so I’m not linking it to my website just yet; however, if you are interested in reading, I’m more than happy to share. Just let me know and I’ll gladly send you a copy.

While the rest of America prepares for the start of another school year, I’m happy to have completed my recent educational undertaking and look forward to sharing and applying what I’ve learned the next time I can help someone.

Image courtesy of Stuart Miles at

Structuring for Life (Insurance)

July 29, 2015 – Investors call it leverage. Taking (or borrowing) money from one source in an effort to multiply gains or address other financial objectives.

Outside of the stock market, leverage need not be motivated by desire for profit, however.

Sometimes it’s just about balance.

Take the following hypothetical example based on a true story from our archives where a client exercised her own bit of leverage to add significant peace of mind for her family when she was in the midst of settling her personal injury claim.

The Background

“Charlotte” was receiving a moderately sized insurance settlement from a personal injury claim.

During my needs assessment discussion with her, she commented several times how worried she was that her 41-year old husband “Geoff”, who was the family’s only source of income since the birth of their twins, was currently without any meaningful life insurance.

Geoff and Charlotte planned for her to be a stay-at-home mom for the foreseeable future and wanted to make sure she would be able to provide for her children should something unthinkable happen to Geoff.

So She Used Leverage:

An affordable $1,000,000 20-Year Term Life insurance policy funded with a structured settlement.


The Easy Solution

I was able to get a $1,000,000 Term Life policy for Geoff, a healthy non-smoker, from a major carrier rated A+ by A.M. Best for a cost of $1,459.00 per year.

Then, as part of her overall structured settlement solution, I secured a structured settlement for her, also from a carrier rated A+ by A.M. Best, that will guarantee $1,459 a year (the cost of the life insurance) for the next 20 years at a cost of just under $24,000.00.

In this instance, $24,000 represented less than 10% of her overall net recovery from the settlement but the life insurance deficit was probably consuming 90% of her worry.

Such a small amount of money to buy such a large amount of protection.

So this solution was not only easy, it met the need. She’s using tax-free structured settlement income to fund a life insurance policy which, if it’s ever paid out, will do so in dollars that are also tax-free.

Now THAT’s leverage.

That’s balance.

That’s just smart!

Image courtesy of AKARAKINGDOMS at


MetLife Ad in Trial Magazine

July 8, 2015 – Just wanted to take a moment to pass along the attached advertisement appearing in this month’s issue of Trial which we have been authorized to share with our clients.

  MetLife_Structured_Settlements_Advertisement_2015-1 (765x1024)

MetLife is one of the excellent life markets we are proud to represent and we are appreciative of their efforts to reach out to the plaintiff bar on the important topic of structured settlements.

A similar ad will appear in an upcoming defense oriented periodical since structured settlements are a common tool used by ALL parties involved in the litigation resolution process.

For those of you planning to attend the AAJ Annual Conference in Montreal this weekend, be sure to stop by to say hello to our friends at MetLife. They’ll appreciate hearing about any structured settlement success stories you’d care to share.

Thank you MetLife for your commitment to the structured settlements industry! Amusez-vous à Montréal!

Special Needs Trust Fairness Act of 2015


June 25, 2015 – Please join us in urging Congress to pass Senate Bill 349, the “Special Needs Trust Fairness Act of 2015.”

The bill, introduced by Sen. Chuck Grassley (R-IA) earlier this year, is supported by the National Structured Settlements Trade Association (NSSTA), the Special Needs Alliance, the National Academy of Elder Law Attorneys, Easter Seals and The Arc.

What a difference a word can make.

The bill simply seeks to modify existing law by adding “the individual” to language identifying those who are capable of establishing a Special Needs Trust (SNT). When the Omnibus Budget Reconciliation Act of 1993 was passed, a technical error resulted in excluding individuals from those able to create their own trust.

While there are certainly situations where disabled individuals cannot create their own trust, allowing those who are fully capable eliminates an unnecessary complexity to the process of establishing a Special Needs Trust.

Our firm is frequently involved in coordinating benefits with Special Needs Trust beneficiaries who can benefit from the power of Special Needs Trusts combined with structured settlement benefits.

We applaud Sem. Grassley for his ongoing leadership and look forward to this bill becoming law.

Image courtesy of Vichaya Kiatying-Angsulee at