Industry research is finally catching up to what settlement planners have seen for years.
By John Darer® CLU ChFC MSSC CeFT RSP CLTC
Understanding the Younger Adults Annuities Settlement Process
A recent InsuranceNewsNet article by David Hanzlik highlights a trend that has been quietly building: younger adults are increasingly open to risk‑managed products that offer stability and predictable income. Hanzlik frames younger investors as a generation shaped by volatility — and in the settlement world, that volatility is magnified.
David Hanzlik’s June 23, 2026 article isn’t about structured settlements, but it highlights something attorneys should pay attention to: younger adults today think differently about stability, risk, and predictable income. That shift matters in the settlement process.
🔍 ANGLE 1:Younger claimants face a different financial reality than their parents.
1. They’re supporting aging parents
Long‑term care costs are exploding. AARP and HHS data show that adult children — often in their 20s, 30s, and 40s — are becoming the default caregivers.
2. They may need long‑term care themselves
HHS reports that 40% of people needing long‑term care are under age 65. For a 28‑year‑old claimant, that’s not a distant risk — it’s a planning imperative.
3. They’ve lived through market trauma
They entered adulthood during:
- The 2008 crisis
- The pandemic crash
- Inflation spikes
- Crypto implosions
- Meme‑stock mania
They know markets can turn on a dime.
4. They don’t want to “manage” money — they want predictability
Younger adults can make impulsive financial decisions — anyone can. And in the secondary market settlement ecosystem, some actors at certain factoring companies exploit that vulnerability with deceptive sales practices. These include:
- “From the Courts” texts, calls or mailers implying judicial authority
- Faux front operations impersonating insurers
- Claims of needing “registration” or “verification” to trigger a call
- Urgency scripts designed to create false pressure
- Authority mimicry meant to confuse vulnerable claimants
These tactics don’t represent the entire industry — but they represent a real and documented subset of bad actors who target younger claimants precisely because they’re more susceptible to high‑pressure or official‑looking solicitations.
A structured settlement annuity reduces that exposure:
- It keeps things straightforward — more like pressing “brew,” less like managing a portfolio or decoding a physics textbook.
- It doesn’t depend on market timing
- It doesn’t disappear in a recession
- It doesn’t eliminate high‑pressure sales tactics, but reduces the number of financial decisions that can be exploited — important even with SSPAs in all 50 states and DC, since some claimants still face aggressive outreach.
It just pays. Predictably. Automatically. Backed by insurers—many of whom have been in business for over 100 years—without handing bad actors an easy opening. And for younger folks who want to know why that kind of staying power matters, see my Structured Settlement Annuity Issuer Longevity Rocks post.
🔍 ANGLE 2: The Attorney Perspective — Protecting Clients and Reducing Future Liability
Attorneys have a different set of pressures, and the InsuranceNewsNet article helps validate the conversation.
1. Attorneys want to avoid future malpractice exposure
A claimant who burns through cash and later blames the lawyer is a recurring nightmare.
Annuities — especially structured settlements — provide:
- Documented prudence
- Predictable income
- A buffer against future disputes
2. Attorneys want to demonstrate holistic advocacy
Younger clients expect:
- Guidance
- Education
- Protection
- A plan
Ignoring financial structure risks appearing transactional.
3. Attorneys want to reduce emotional volatility on settlement day
Younger claimants often:
- Overestimate their ability to manage money
- Underestimate long‑term care risks
- Get overwhelmed by lump‑sum decisions
Annuities simplify the conversation:
“Here’s the part of your settlement that will always be there for you.”
4. Attorneys want to align with modern financial planning
Hanzlik’s article makes it clear: RILAs and indexed annuities are no longer “retirement products.” They’re risk‑managed growth tools.
5. Attorneys want to avoid the ‘cash‑out regret’ phenomenon
Younger claimants who take lump sums often:
- Spend too fast
- Get pressured by family
- Get targeted by factoring companies
- Lose eligibility for benefits
Attorneys know this. Annuities help prevent it.
🧱 ANGLE 3: The Industry Perspective — Blanchett’s Research Confirms the Trend
David Blanchett, PhD, CFA, CFP®, has repeatedly demonstrated that younger individuals often derive more value from annuitization than older individuals because:
- Mortality credits compound longer
- Guaranteed income offsets more years of volatility
- Longevity insurance is more valuable earlier
This dovetails perfectly with the InsuranceNewsNet article’s thesis: Younger adults want resilience, not just returns.
And for those who qualify structured settlements are the purest form of resilience.
Because unlike retail annuities, structured settlements offer:
- Income‑tax‑free payments for payments for damages under IRC §104(a)(2) for personal physical injury or physical sickness, and/or under IRC §104(a)(1) for workers’ compensation.
- No contribution limits — the settlement amount, the choices made, and the agreement of the parties determine the funding, not annual caps.
- No direct market exposure — even index‑based structured settlements use an index as a crediting reference, not as an investment or asset pool.
- No behavioral risk — no allocation decisions, no timing decisions, no “should I rebalance?” moments.
- No temptation to “manage” anything — the structure removes decision‑points that can be exploited.
- Court‑approved protection — especially for minors and many adult settlements requiring judicial review.
- A payment obligation backed by highly regulated life insurers — subject to capital, reserve, and solvency oversight.
It is resilience in its most literal, financial, and behavioral form.
🔍 ANGLE 4: Two Distinct Product Paths for Younger Claimants
Younger adults are not a monolith. Their needs fall into three broad categories:
🧱 PART A — Traditional Fixed Structured Settlements (The Core)
The foundation. The workhorse. The default for decades.
A structured settlement provides stable, predictable income streams — current or future — that can be used to support a wide range of needs over time.
Claimants benefit:
- Guaranteed payments, backed by the full faith and credit of the issuing insurance company
- No volatility once locked‑in and ultimately funded; a lock‑in preserves rates, but the protection is lost if the case is not ultimately funded.
- In wrongful death cases where an insurer or defendant agrees to prefund the structure, the claimant can effectively not lose interest while a settled case winds its exhaustive path through multiple courts for approval (for example, in New York, from county Supreme Court approval through final resolution in Surrogate’s Court, which can take years).
- Customized income streams — income‑tax‑free when damages qualify under IRC §104(a)(1) or §104(a)(2), and tax‑deferred when they do not. In some situations, new legislation may provide tax‑favored treatment for specific categories of damages, and structured settlements can operate within those statutory provisions once enacted.
- Ideal for minors and vulnerable adults (court oversight; fewer financial decision‑points)
- Can be helpful in long‑term care planning by providing stable, predictable income that supports ongoing care needs, or the funding of long‑term care insurance premiums, or premiers for life insurance with long‑term care components — without introducing market or behavioral risk
Who this path fits:
- Minors
- Claimants with disabilities
- Claimants with long‑term care needs
- Claimants supporting aging parents
- Claimants vulnerable to exploitation
Why attorneys like this path:
- It’s defensible
- It’s predictable
- It reduces future disputes
- It protects vulnerable clients
🧱 PART B — Index‑Based / Index‑Linked Structured Settlements
Pacific Life • Prudential • Independent Life
These are still true structured settlements, but with index‑based crediting strategies. All three annuity issuers offering index based structured settlement solutions sought and received Private Letter Rulings supporting their product designs.
Why younger claimants benefit:
- Potential for higher long‑term payouts
- Still income tax‑free when payments represent excludable damages.
- Stable payment streams and guaranteed lump sums provide a known baseline.
- Still reduces behavioral risk
- Still court‑approved for minors, incompetents, and in wrongful death cases.
Who this path fits:
- Younger claimants with long time horizons
- Claimants who want inflation‑sensitive growth
- Claimants who want no direct market participation, but are comfortable with index‑based crediting method that provides upside potential without exposing the claimant to market losses.
- For some claimants, it may provide a more compelling narrative than a strictly “fixed‑only” structure.
Why attorneys like this path:
- It blends certainty with opportunity
- It aligns with modern financial planning
- For some attorneys, it may provide a more compelling narrative than a strictly “fixed‑only” structure.
🔍 PART C — Market‑Based Options (RILAs, Indexed Annuities, Accumulation Products)
The “Hanzlik category” — risk‑managed growth tools.
These are not structured settlements. They are market‑linked accumulation vehicles used outside the §104 structure.
Why younger claimants benefit:
- Buffers and floors
- Defined outcome ranges
- Tax‑deferred growth
- Upside participation
- Ability to convert to lifetime income later
Who this path fits:
- Claimants with higher financial literacy
- Claimants with other guaranteed income sources
- Claimants planning for long‑term care funding
- Claimants who want a “risk‑managed equity sleeve”
Why attorneys like this path:
It provides a middle ground between “all cash” and “all guaranteed”
🎯 Bottom Line
When even mainstream industry voices are acknowledging that younger adults are embracing annuities, the settlement world should take note. For claimants, it’s protection. For attorneys, it’s prudence. For both, it’s the future.
Related Reading
Why annuities are gaining traction with younger investors – Insurance News | InsuranceNewsNet June 23, 2026
AARP Report Finds Long-Term Care Costs Outpace Income June 11, 2026
