Traumatic Brain Injury Settlements: Planning Considerations


Regardless of severity, a traumatic brain injury (TBI) can significantly impact a claimant’s financial and medical needs. If planned properly, a settlement can fund the resources needed to optimize the claimant’s long-term quality of life. While each case is unique, there are common considerations when planning a TBI settlement.

Challenges Faced by Claimants with Traumatic Brain Injuries

Long-term consequences from a TBI may include hearing/vision loss, headaches, seizures, mood disorders, difficulty focusing, verbal and written communication issues, paralysis, and more.

The implications of such effects can make it difficult to function normally. The claimant may need to find a new job or be unable to work. A range of therapies, medications, surgeries, and doctors’ appointments may be necessary. The claimant may have trouble managing finances or making informed decisions. A settlement consultant will thoroughly assess the claimant’s needs before suggesting appropriate settlement options.

Settlement Options for Claimants with Traumatic Brain Injuries

The claimant may have immediate needs that require up-front cash from the settlement, such as outstanding medical bills. To help preserve the remaining funds, the claimant should consider settlement options that spread the funds out over time. Here are a few:

Structured settlement annuity: A structured settlement annuity provides a source of long-term, guaranteed1 income distributed on a schedule that meets the claimant’s anticipated needs. With a locked-in interest rate, the funds grow income tax-free and are unaffected by stock market fluctuations.

Special Needs Trust: If the claimant is disabled, the settlement can fund a special needs trust (SNT). An SNT can help the claimant preserve access to needs-based benefits like Medicaid and SSI while paying for goods and services not covered by those benefits.

Claimants not currently receiving needs-based benefits but who may require future government assistance can consider a trigger trust, in which a support trust is established to convert to an SNT upon a “triggering” event, such as applying for Medicaid.

Combination Approach: A structured settlement annuity can fund the claimant’s trust. Rather than funding the trust with a cash lump sum, the claimant can leverage the tax-free growth of the structured settlement.

Additionally, funding a trust with a structured settlement annuity may help lower fees. Trustee fees are typically based on the sum of assets held in the trust; by utilizing periodic payments to feed the trust, the total balance will remain lower than it would if funded with a cash lump sum.

Contact Sage for TBI Settlement Assistance

Sage Settlement Consulting provides comprehensive, individualized assistance for claimants with traumatic brain injuries. For more information, contact your Sage consultant today.

1 Guarantees are subject to the claims-paying abilities of the issuing insurance company.