About to structure your settlement? Here are five questions to ask about the insurance company that will guarantee your settlement.
A structured settlement annuity provides you with guaranteed payments over a designated period—for several years and even through your lifetime.1
That’s why it’s important to carefully evaluate the insurance company guaranteeing your structured settlement and find the best option for you.1 Use the questions below to help guide you during the decision-making process.
1. How long has the insurance company been active in the structured
Long-term financial products like a structured settlement annuity should come from long-term providers that have a diverse mix of business. Look for insurance companies who have been consistently offering structured settlements for many years and have industry expertise.
2. What are the insurance company’s credit ratings?
Ask for the insurance company’s credit ratings or look for them on the company website. Credit ratings are strong indicators of an insurance company’s financial stability and their ability to provide you with guaranteed future payments.1
Credit ratings are shown as a letter or series of letters, such as Aa3 or B. There are four major insurance company rating agencies: A.M. Best, Moody’s, Standard & Poor’s, and Fitch. Because each agency has its own rating scale, the same insurance company could receive different ratings from the various agencies. Please visit the rating companies’ websites for definitions of their rating scales.
3. What is the size and strength of the insurance company?
Ask for the insurance company’s Financial Quality statement or look it up on their website. You can assess the insurance company’s total assets versus their total liabilities. Total capital, often defined as capital plus surplus, is another key metric. Both assets vs. liabilities and total capital are important indicators of an insurance company’s financial strength.
4. What is the insurance company’s general account investment portfolio composed of?
The insurance company’s guarantee is only as good as their financial quality and strength.1 Ask for information about how the company is investing their assets to ensure that they can meet the long-term guarantees that structured settlements provide.1 Find out how much of their general account portfolio is invested in bonds and the respective bond quality.
5. What kind of support will you receive from the insurance company after
the structured settlement has been issued?
Be sure to ask about the insurance company’s digital tools to see if you can access your account online. Also, ask about their customer support after the structured settlement has been issued so that you know who to contact in case you have questions. Structuring your settlement is an important decision that can affect your financial future. Ask the questions above and evaluate the information that you receive to determine the best option for you. Your attorney might be able to help you find a structured settlements specialist or you can find more information from the National Structured Settlements Trade Association at www.nssta.com.