Structured Settlement Rates find a new low
While low interest rates are good for spurring economic activity and refinancing mortgages, they are not so good for a beneficiary looking to settle with a structured settlement.
For the first time in my 20 year career, I actually ran a quote where a 10 year period certain pays out less than it costs to purchase. What a great investment plan…Pay money now so that you can get less paid out over 10 years. The good news is not every benefit stream has this anemic payout and there is still the benefit of substandard underwriting. But something has to give with these rates. Where is our old nemesis inflation?
Structured settlements are used quite a bit to fund MSAs. And since the average MSA has a duration of more than 10 years and generally involves an impaired life expectancy, they are still the best deal going to keep CMS’ fingers out of the settlement pie.
But once I finish refinancing my mortgage, I wouldn’t mind seeing 5%-6% IRRs again.