by John Darer® CLU ChFC MSSC CeFT® RSP CLTC
With 5% plus structured settlement returns possible, attorneys and plaintiffs alike may wish to consider creating a bond ladder simulation with structured settlements.
How a “Bond Ladder Simulation” Structured Settlement Works
- A structured settlement can be designed to simulate a bond held to its maturity, wherein the payee receives income for a fixed period certain, followed by the return of the cost of the structured settlement in a guaranteed lump sum at the end of the fixed period of time.
- The return of cost of structured settlement can then be reinvested if desired, but depending on the investment chosen, the interest earned on the reinvestment may be taxable.
- Multiple structured settlement bond simulations can be done to form a ladder of income and lump sums for reinvestment.
For example.
Cash Flow 1 Monthly income for 10 years followed by a lump sum return of cost
Cash Flow 2 Monthly income for 12 years followed by a lump sum return of cost
Cash Flow 3 Monthly income for 15 years followed by a lump sum return of cost
Cash Flow 4 Monthly income for 20 years followed by a lump sum return of cost
Several cash flows can be combined in a single contract or can be split funded with multiple structured settlement annuity issuers
Another attractive feature of structured settlements is that while a structured settlement offers safety, security and guarantees, protecting the claimant’s settlement — it also provides an excellent tax-free return in cases involving physical injury.
This tax-free rate of return stands up well when compared to tax exempt investments with a similar risk profile. See Structured Settlements Vs Alternative investments. Bonds are more liquid than bond simulation structure since most are traded on a regulated market. Structured settlement payments can be sold or transferred if a judge approves in your state of residence. The market is under regulated and the regulation of solicitation practices by salespeople at so called factoring companies, cash now companies, settlement purchasers or structured settlement buyers, is bereft of substance.
Last updated May 10, 2026
Leave a Reply