Application of the CBA
CBA has been found to be a particularly effective means to
maximize both safety and payout benefit.
In comparing the CBA with period certain annuities the
payout generally favors the CBA.
However, the CBA is a rigid format which does not easily
lend itself to modifications such as annual increases, deferments
or periodic lump sums. These
types of modifications are best handled with the inclusion of
annuity products. Also,
payment requirements which include lifetime benefits cannot be
fully addressed by a CBA due to the fact that the longest bond
maturity is thirty years. In
these situations a deferred lifetime annuity can be added to
coincide with the maturity of the bonds held in the CBA.
a stand-alone, CBA is sufficient to meet the needs of the
plaintiff. However, it is not uncommon to combine the advantages
of both the CBA and annuity programs to provide the plaintiff with
advantages afford by both types of qualified funding programs.
These scope of
benefit programs which can be designed by combining CBA’s with
annuities is limited in large measure only by the imagination and
creativity of the settlement specialist.