The Finn Blog

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

Graduate

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 FreeDigitalPhotos.net

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.

Balancing

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 FreeDigitalPhotos.net

 

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

DC

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 FreeDigitalPhotos.net.

Best Retirement Income Choice

June 18, 2015 – So you’ve saved a bunch of money during your working life and are finally getting serious about making some decisions about how to make sure this gob of money lasts for as long as you do.

Maybe you’re lucky and worked for an employer that still offered a pension.

Social Security or its public employee equivalent or both will cover some of your future needs.

But in addition, you have this lifetime accumulated mass (larger for some, smaller for others) of dollars you need to stretch out over your golden years.

What do you do with your money?

Who can you believe?

If you put any stock into recent research by someone qualified to speak intelligently on the topic, you might want to read the latest coming out of the Mercatus Center at George Mason University.

Government Policy on Distribution Methods in Individual Accounts for Retirees: Life Income Annuities and Withdrawal Rules is an excellent Working Paper, authored by visiting scholar Mark J. Warshawsky, PhD.

The paper gives additional support to the long-standing (but frequently maligned by the financial planning community) notion that many people can benefit by choosing life annuities to meet some portion of their overall retirement income needs.

“The life annuity is indeed an effective instrument for distributing retirement assets to produce lifetime income; it functions generally somewhat better than the withdrawal rules in widespread use.”

The paper itself is chock full of supportable reasons why it might make sense for you to give annuities serious consideration for some of your retirement funds.

Assuming you’re not a policy wonk inclined to read the 48 page findings cover to cover, this summary by RealDealRetirement.com editor Walter Updegrave which appeared in yesterday’s online edition of CNNMoney gives a good common sense perspective:

“Which Generates More Retirement Income – Annuities or Portfolio Withdrawals?”

For the record, we’re completely on board with the “don’t put all your (nest) eggs in one basket” approach to retirement income planning.

Cash FlowWe’re cash flow advocates!

As such, we just think that locking up some portion of your money to make sure it lasts for the rest of your life regardless of how long you live makes too much retirement sense to overlook.

It’s always reassuring when we come across supportable information that reinforces something we’ve been telling clients for years.

Annuities, whether it be through a structured settlement, structured attorney fee, structured sale or simple retirement fund rollover, just seem to simplify the whole idea of taking care of your future needs for so many people.

Happy Annuitizing!

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

The Taylor Swift – Structured Settlement Connection

DCMay 29, 2015 – Hopefully the hook worked and you’re reading this post to find out what possible connection could exist between superstar recording sensation Taylor Swift and Structured Settlements.

Truth be told, there are probably about 535 connections and you can find them all in Washington, DC every so often.

It turns out, in this city where consensus among Democrats and Republicans seems rarer than an awards show where Taylor Swift doesn’t walk away with at least one trophy, the two parties have discovered a few areas where common ground is possible irrespective of party allegiance:

Taylor Swift and Structured Settlements

As reported by CNN Senior Digital Correspondent Chris Moody and elsewhere, DC politicians have found a bipartisan interest in this summer’s Taylor Swift concert tour.

Some things are so undeniably good that one’s political party affiliation just doesn’t matter.

Take structured settlements, for instance. Since their inception more than three decades ago, structured settlements have always enjoyed broad bipartisan support throughout both chambers of Congress.

As this joint statement of the American Association of People with Disabilities and the National Structured Settlements Trade Association makes clear, the legislative history of structured settlements is awash with names of some of history’s most distinguished political leaders supporting this great settlement option.

If elections were being held today for someone tasked with bridging divides and uniting the masses, Taylor Swift would easily get my vote. Her unique ability to connect with people of all ages, sizes, shapes and genders makes her the perfect candidate.

In a way, you might even say she’s the personification of a structured settlement!

Disclaimer

To be clear, I have no reason to believe Taylor Swift even knows what a structured settlement is so there really isn’t any direct connection between the two.

Not really.

But with this phenomenal artist’s uncanny and well demonstrated history of showing compassion and concern for those who are suffering, I have to believe she’d be a fan of them if she knew how much they helped people.

Taylor, if you’re reading this, hopefully you can shake, shake, shake off any liberties I’ve taken in riding your coattails. All the best with your upcoming tour and please feel free to reach out if you’re interested in learning more about structured settlements.

I promise to never, ever, ever invoke your name in one of my blog posts again.

(Unless, of course, you want me to)

Image of US Capitol Building courtesy of Vichaya Kiatying-Angsulee at FreeDigitalPhotos.net

Survey Says . . .

From our May 28, 2015 Newsletter

With the structured settlements industry recently concluding its best first quarter since the Great Recession officially ended six years ago, 2015 is shaping up to be a banner year for successful utilization of this proven settlement option and claims resolution tool that helps so many.

Wonder what’s driving this upward trend?

Probably no single answer; however, a few surveys provide insights into some possibilities while simultaneously highlighting the perceptions of those engaged in the litigation resolution process.

“There is no truth. There is only perception.”

– Gustave Flaubert –       

Three distinct categories of stakeholders to the  structured settlement transaction – claimant, claims professional and plaintiff attorney – weigh in to share their versions of the truth about structured settlements in a few telling surveys linked here for your convenience:

The Claimant’s Perception

“Structured Settlements vs. Lump Sum Payments”

A report prepared by Prudential Global Strategic Research in conjunction with Prudential Structured Settlements seeks to compare and contrast claimants’ views on these two settlement options.

(Full disclosure: I serve on Prudential’s Structured Solutions Leadership Council which convenes regularly to discuss topics of mutual interest as a service to the industry)

Key Truth: Plaintiff attorneys were cited as those most influential in helping make the decision to structure (68%) or to take the lump sum (47%).

The Claims Professional’s Perception

“Understanding Structured Settlements” – Authored by Kevin Silo and Taylor Smith for the May, 2015 issue of Claims Management, this article reveals the results of a survey conducted to gauge perceptions of front line claims professionals about structured settlements.

(Full disclosure: I am a Fellow of the Claims & Litigation Management Alliance and past president of the National Structured Settlements Trade Association (NSSTA), which commissioned this survey through CLM Advisors)

Key Truth: There is no down side to engaging a structured settlement consultant on a claim. Claims professionals felt doing so either made the claim more likely to settle (47%) or, at worst, had no effect on the settlement (52%). Nobody chose the “less likely to settle” option.

The Plaintiff Attorney’s Perception

NSSTA conducted a survey of plaintiff attorneys to better understand how they feel about structured settlements and when they are most likely to recommend them. For your convenience, we’ve uploaded a copy of the survey to the Finn Financial Group YouTube Channel.

(Full disclosure: I never seriously considered attending law school once I learned calculators were not involved)

Key Truth: 82% of plaintiff attorneys believe a structured settlement consultant brings value to their clients through their knowledge and ability to explain the benefits and drawbacks of structured settlements.

BONUS TRUTH: 80% of attorneys who structured their attorney fees did so for retirement planning purposes.

In Summary

Individually and collectively, these three surveys lead to one irrefutable truth: ALL three major stakeholders to the litigation process – claimants, claims professionals and plaintiff attorneys – hold very positive views about the use of structured settlements.

We don’t need a survey to tell us that’s pretty good news!

We do, however, hope you enjoy looking at these surveys and will call us if you have any questions or wish to learn more on any topics discussed.

Thank you for the opportunity to be of service and best wishes for continued success in your personal and professional lives.

Survey images courtesy of Stuart Miles at FreeDigitalPhotos.net 

Great News for Annuities

April 15, 2015 – Yesterday was a great day for annuities!

According to a report in InvestmentNews, Ken Fisher is leaving the building.

You may have never heard of Ken Fisher but you’d be hard pressed to miss him if you’ve ever spent any time on Google trying to figure out what to do with your retirement money.

He’s the guy who goes around saying (and presumably paying decent money for ad space to have him quoted saying) “I Hate Annuities” and beseeching others to do the same.

When you’ve dedicated your professional life to helping people using various types of annuities to improve their lives as I have and understand firsthand how valuable they can be, it’s hard not to be offended but such an antagonistic statement.

“Hate” is a very strong word. Most of our parents and teachers frowned upon our usage of it when we were children.

Negative advertising and fearmongering must work, though, and I’m sure those ads directed more than a few people to Fisher’s $60 billion money management firm.

For that reason alone, he shouldn’t hate annuities. He should love them!

Don’t get me wrong. I don’t begrudge him the success of his advisory firm one bit.

And even though it’s not the focus of our practice, you’ll never catch me unilaterally advocating against actively managed funds or passively invested mutual funds. They obviously have a place in the financial planning discussion.

But so do annuities and Fisher knows this. Or should.

I take issue, however, with anyone who uses incendiary half-truths and red herrings to cast aspersions on an entire industry that serves such a public good. Especially when I’m suspicious of that person’s motives.

Hopefully, the investing public is smart enough see this tactic as the self-serving sleight of hand that it is.

When a guy like Ken Fisher says he hates annuities, people would be well advised to be doubtful.

If fictitious oil baron J.R. Ewing said he hated solar energy, wouldn’t you feel you intuitively understood why?

Eventually, possibilities become clearer for those who look under the surface to explore what else might be driving the negative sentiment.

A quick trip to the calculator reveals that if Fisher could capture even a fraction of the $2.36 trillion in annual annuity purchases made over the past decade as reported by LIMRA Secure Retirement Institute, it would be a hefty boost to his personal net worth.

According to the authors of the scholarly Rational Decumulation, annuities are one of the most cost effective and least risky asset classes for generating retirement income for life. They have been around since the Roman Empire and they’re not going away anytime soon.

If the InvestmentNews report is accurate, the same cannot be said for Ken Fisher.

And those of us annoyed by his audacious ads won’t mourn his departure.

Fishing for Money

Image courtesy of bplanet at FreeDigitalPhoto.net

Celebrating Our 263rd Anniversary

April 1, 2015 – Although most of our clients have come to think of the Finn Financial Group as the people who help them meet their 21st century future financial security needs, it is with great pride that we pause today to pay tribute to our firm’s original founding father who, on this day in 1752, originated the concept that would grow to be known as a structured settlement.

When my 6th great-grandfather Benjamin Franklin, in his spare time and before his foray into starting a new country, founded the Philadelphia Fire, Life and Structured Settlements Company, he did so with the noblest of intentions. He wanted to do something that would, according to his will, “secure the blessings of financial security to (him)self and (his) posterity” in hopes that his many offspring and their descendants would be properly taken care of.

With that simple mission, he allocated a portion of his wealth to be set aside in such a way that, upon his death, it could be “structured to settle the meants which are and of Right ought to be . . . totally dissolved” and to “thereafter pay sums in perpetuity or until death, whichever comes first, with the interest therein earned” for all his descendants known and unknown.

“Meants” were the 18th century colloquial term for “intents” of those who had borrowed money. Today, we would call these debts.

Fearing overexposure, GB6 (6th great-grandpa Ben as we call him around the shop these days) didn’t want his new “structured settlemeant” firm to bear his name but did want to have at least some noticeable, if obscure, affiliation to its founding.

Upon arrival at the Fifth Continental Congress, he lamented, “Curse this rankling gout! Would that I could extract it from my surname and live in peace like the nobles I despise but strive to emulate.”

He paused, and then smiled realizing what had just occurred.

Then and there, in a rare display of humility but with typical ironic humor and quite by accident, he took the “rankl” out of F-rankl-in, added an extra “n” (in deference to William Penn whose hat he always coveted) and opened the doors to Ye Olde Finn Financial Structured Settlemeant and Annuity Shoppe.

Needing to take leave of the Congress to go next door to fill out the articles of incorporation for his new venture, he asked a young Virginia delegate tasked with drafting what he thought was the luncheon menu to mind his papers until he returned. Only later would he realize he had neglected to remove a copy of his will from his satchel which was liberally borrowed from by Thomas Jefferson in creating something that was not a luncheon menu after all.

So please join us in celebrating our 263rd year in offering structured settlements and specialty annuity products and services. We’re proud to be of service to you and look forward to our next 263 years!

Sincerely,

Dan Finn

(PS Dedicated to my friend, structured settlement mentor and world’s best practical joker Bob Kringlie for whom April 1 – our firm’s actual first day in 2009 – was considered a national holiday)

Life Insurance Industry Forecast: Smooth Sailing Ahead

Smooth Sailing

 

March 16, 2015 – Demonstrating that good news often travels in threes, I’m pleased to unfurl the attached triad of recent links which point to “smooth sailing” for the life insurance industry in 2015:

A.M. Best: U.S. Life/Annuity Health Rating Outlook Remains Stable

Fitch: Stable Outlook for Life Insurers in 2015

Moody’s outlook for US life insurance industry remains stable for 2015

When people enter into life insurance or annuity contracts, they are buying promises that future financial risks they face will be properly addressed.

As these three independent rating agencies look ahead, they offer assurance to policyholders that their promise is well placed.

Even when local, national or global events conspire to test that promise, as was the case during The Great Recession, the industry as a whole fared exceptionally well.

A United States Government Accountability Office (GAO) report on the “Insurance Markets – Impacts of and Regulatory Response to the 2007-2009 Financial Crisis” reveals:

“(t)he effects of the financial crisis on insurers were generally limited . . . .”

Life insurers, with the exception of the variable market (which our firm doesn’t offer), fared especially well.

The structured settlement and retirement annuity companies we are proud to represent have long histories of honoring their promises and making their payments on time.

So if you want to increase your chances that your money will be there in the future when you need it, know that if you choose a highly rated life insurance annuity, you’ll be choosing something that has weathered many storms and is still solidly afloat.

(Image courtesy of Stuart Miles of FreeDigitalPhotos.net)