As I pointed out in a prior post that highlighted the recent Wharton School study on the use of immediate income annuities, empirical evidence by top scholars is beginning to build a factual case as to why immediate annuities and life income annuities are a superior choice for individuals with limited assets and are facing retirement.
What they failed to mention in that article, and in the study, is that not only is an immediate income annuity the superior choice for investors looking to create an income out of a lump sum they have accumulated for retirement, but that many of the life markets are beginning to allow for sub-standard life underwriting on non-structured immediate annuity business.
Why this is important is obvious to anyone who works in the settlement annuity business, which is that substandard medical underwriting allows for an individual with an impaired medical profile or history to actually benefit from that fact by having their actuarial age set higher/older by the life company, thus increasing the amount of money available in monthly payments, all while transferring the risk of out living your money to the life insurance company.
I strongly suggest if you are a settlement professional, trial lawyer or financial professional that you take the time to look at the findings in the Wharton study and get a firm grip on the conclusions. The picture it paints for immediate annuities, and by extension structured settlement annuities, is very positive and it's something that deserves wide circulation among trial lawyers and others who work with injured parties, retirees and others looking at the best method of maximizing their monthly income for the duration of their lives.
While the full study is yet to be made available on the Wharton site, you can find some outstanding resources by clicking through their knowledge page. Wharton has done a superior job in starting to look at the decumulation phase of spending lump sums over time and it is clearly in the interest of our industry to be aware of this research.