MetLife Retirement & Income Solutions

Recommending Structured Settlements for Employment Claims: Where Do Brokers Fit In? 

Sep 29, 2023

Structured settlements have become an attractive solution for non-physical injury cases, including employment lawsuits, amid concerns that plaintiffs may deplete a lump sum award. However, employment plaintiff attorneys and their clients need support to understand their options — and they’re looking to brokers for help. 

Employment plaintiff attorneys increasingly view structured settlements as an attractive option for their clients 97% are very or somewhat familiar with their clients’ ability to take their employment award as a structured settlement 96% recommend their clients consider using a structured settlement at least occasionally 86% agree that structured settlements can be a good negotiating tool for employment matters to speed up the resolution of a claim and/or make it more likely to settle This is because structured settlements offer guaranteed income 57% of employment plaintiff attorneys would recommend structured settlements because they provide guaranteed payments for either a certain time period or for life 51% would recommend structured settlements because plaintiffs won’t deplete their award too quickly well as potential tax advantages 48% of employment plaintiff attorneys would recommend structured settlements because they may provide tax-efficient payments/reduce taxes Employment plaintiff attorneys need education Among the small subset of employment plaintiff attorneys who don’t recommend structured settlements, education remains a barrier. Their primary concern: They believe the option is difficult for them to explain to their clients and/or the option is too complicated for their clients to understand. Nine in 10 (92%) employment plaintiff attorneys say they would be more likely to recommend structured settlements to their clients after seeing a hypothetical example of the potential tax benefits for an employment structured settlement versus a lump sum Brokers have an opportunity to help employment plaintiff attorneys as they recommend structured settlements 86% of employment plaintiff attorneys believe they should be the one to recommend that their clients consider a structured settlement 86% Overall Agree However, they’re looking to brokers for education and insights 84% of employment plaintiff attorneys believe structured settlement brokers play an important role in positioning the value of a structured settlement 73% encourage their clients to meet with a structured settlement broker to discuss their award This includes 42% who strongly agree they should be the one to make the recommendation Employment plaintiff attorneys explain how brokers can help 1. Offer education and support “Brokers can provide best practice advice on how to communicate with clients, how to manage risk, and how to select the right insurance company/annuity provider.” 2. Highlight the potential tax advantages “Brokers can create customized settlement plans that meet specific needs of the clients.” “[Brokers can] recommend specific tax solutions” and “be more willing to explain the tax benefits.” 3. Share real-world success stories “Structured settlement brokers should educate employment attorneys on the benefits of structured settlements and provide case studies or examples of successful settlements with previous clients.”

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