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July 13, 2006

Cost of Structured Settlement... Daily Rates

by John Darer CLU ChFC MSSC CeFT CLTC

What Are Structured Settlement Daily Rates?

Structured settlement daily rates are an important part of the pricing process of creating structured settlements, structured sale or secured installment sales of real estate or businesses,  and non qualified structures used for non qualified assignments. Annuity issuers of structured settlements circulate book rates (name "book rates" originated from "the old days" when a manual rate book or rate sheet and calculator were used) to structured settlement brokers on a regular basis. Book structured settlement rates change from time to time reflecting the general market conditions.

Structured settlement rates will vary by carrier according to the annuity issuer's investments, statutory guidelines as to reserves, surplus position, overall business plan and philosophy, whether or not there is a rated age and other factors. Structured settlement brokers that have access to the wide spectrum of markets can shop the market of structured settlement annuity issuers for the most competitive rates. Structured settlement book rates must be set responsibly considering the large and varying flow of premium income and the fact that statutory guidelines of most states require the matching of assets to liabilities.

Most carriers also offer daily structured settlement rate pricing. When a competitive structured settlement offer is being made or structured settlement is being finalized, the structured settlement broker will take the proposed payment stream to the structured settlement annuity issuer or issuers in an attempt to see if the proposed payment stream can be funded at a rate more competitive than book rates. Taking into account the statutory asset/liability match requirements it may be possible in the spot rates in the bond market to find assets to match to the proposed liability (to the annuity issuer) created by the proposed structured settlement (which will permit better daily rate pricing). Please note that this is not always a given, particularly in periods of declining interest rates.

Minimum premium for structured settlement daily rate pricing ranges from None to $2,000,000 depending on the structured settlement annuity issuer. Structured settlement daily rates may be extended until noon of the next business day to up to 10 days depending on the carrier with most being good "until the end of the next business day". If case negotiations are ongoing some will consider an extension on a case by case basis, if market conditions permit. One carrier will give greater extensions on cases with structured settlement annuity premium (to that annuity issuer) of over $3,000,000.

Good structured settlement brokers make it look easy but circus juggling talents are a prerequisite when rates are in flux. Jugglerwitte_santonio_art_of_the_circus Jugglers_emil_rothegatter_1887witte_muse

The use of structured settlement daily rate pricing may be just the thing that bridges the gap between in negotiations over a hotly disputed item of damages. In another application it may be used to enhance the value of a policy limits offer where the defendant has limited coverage and no assets.

Artist Emil Rothengatter (a/k/a E. Ro or E.P. Roe). Images taken from "Art of The Circus"exhibit and used with permission of the Witte Museum, San Antonio, TX .

 

 

Posted at 08:45 AM in Albany New York Structured Settlements, Bridgeport Structured Settlements, Bronx New York Structured Settlements, Brooklyn New York Structured Settlements, Buffalo New York Structured Settlements, Connecticut Settlement Planning, CT Structured Settlements, Dallas Fort Worth TX Structured Settlements, Detroit Michigan Structured Settlements, Hartford CT Structured Settlements, Jacksonville Florida Structured Settlements, Kings County Structured Settlements, Lexington KY Structured Settlements, Long Island NY Structured Settlements, Los Angeles CA Structured Settlements, NC Structured Settlements, New Jersey Structured Settlements, New Orleans Louisiana Structured Settlements, New York City Structured Settlements, New York Personal Injury, New York Structured Settlements, Newark NJ Structured Settlements, Newburgh Structured Settlements, Non Qualified Assignments, North Carolina Structured Settlements, Rated Ages in Structured Settlements, Retirement Planning, Saving Money, Settlement Planning Issues, Settlements in Queens County New York, St. Louis Structured Settlements, Structured Sales, Structured Settlement Annuity, Structured Settlement Brokers, Structured Settlement Cost, Structured Settlement FAQ, Structured Settlement Information, Structured Settlement Lock In, Structured Settlement Payments, Structured Settlement Quote | What You Need To Know, Structured Settlement Quotes, Structured Settlements, Structured Settlements 101, Suffolk County Structured Settlements, Syracuse Structured Settlements, VA Structured Settlements, Virginia Structured Settlements, Washington Structured Settlements, West Virginia Structured Settlements, White Plains Structured Settlements |

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Guide to Structured Settlements 2023

  • What is a Structured Settlement? What You Need to Know
    Structured settlements and what you need to know about them including a helpful introductory video featuring 2023 A.M. Best Client Recommended Structured Settlement Expert and Registered Settlement Planner John Darer® of 4structures.com® LLC
  • How Do Structured Settlements Work? How Structured Settlements Work
    How structured settlements work, including 4structures.com LLC's super helpful structured settlement flow chart/diagram showing how structured settlements fit in on the spectrum of settlement planning solutions.
  • Rated Ages and Structured Settlement Cost
    Rated Ages for Structured Settlement Annuities present advantages to all parties. Shift the mortality risk to a life insurance company whose business it it is to assess mortality risk to price its life insurance and annuities. Rated ages boost your structured settlement annuity benefit per premium dollar, or your yield on lifetime payments. Rated ages help to reduce the cost of funding a Medicare Set Aside arrangement where a Structured MSA, is being used { WCMSA LMSA or NFMSA].
  • Structured Settlement Annuity Companies 2023
    Which life insurance companies issue structured settlement annuities going into 2023? A list of current structured annuity issuers, the location of their home offices and their financial ratings from A.M. Best, Moodys, Fitch, Standard & Poors and/or other Tier1 NAIC ratings, with links to their websites and other useful information.
  • Treasury Funded Structured Settlements
    Treasury Funded Structured Settlements are a settlement option for the most conservative using the OTHER permissible qualified funding asset under IRC 130(d), United States Treasury Bonds in addition to, or instead of, structured settlement annuities. Treasury Funded Structured Settlements can also be used to fund installment sales, also known as structured sales and other non qualified structured settlements.
  • Compare Structured Settlement IRR to Other Settlement Alternatives
    Use the Taxable Equivalent Yield chart to help compare the Internal Rate of Return (IRR) of a structured settlement to other alternative or complementary investments. Need help with the chart? Call 4structures.com® LLC at 888-325-8640
  • Structured Settlement Payments | Types of Structured Settlements
    Ways You Can Structure Your Settlement Payments. With a structured settlement you can have more than one type of payment in a single contract. Different types of structured settlement payments can be customized and combined to meet your needs on a stand-alone basis, or in conjunction with other financial products. Diversify your structured settlement, if you wish, by funding with more than one annuity issuer, with treasury funded structured settlements, index linked structured settlement payments and market based structured .
  • Structured Attorney Fees for Tax Deferral for Contingency Fees
    Structured attorney fees is a financial strategy that offers a unique way to defer taxes for lawyers and law firms. Lawyers CAN structure their legal fees even if the plaintiff doesn't structure their settlement. There are multiple ways to structure your attorney fees, such as the an index linked structured settlement where payments are adjusted based on upside changes in the S&P 500 with no downside and a cap of 5%. Trial Lawyers may also use a special deferred pay/deferred compensation arrangement, if market based returns returns are desired with no cap. Plan NOW for year end! Put structured attorney fee expert John Darer® on your settlement planning team.
  • Structured Settlement Annuity Company Customer Service Phone Numbers
    Receiving structured settlement payments from your own structured settlement or inherited structured settlement? You'll like this huge time saver. Click for a comprehensive list of customer service telephone numbers that includes both current AND former structured settlement annuity issuers and reinsurers. If you have simple bank or beneficiary changes, or if the insurance company that issued the structured annuity has merged, sold or spun off its block of structured annuity business (e.g. Aviva, Allstate, Transamerica, AEGON, GE Capital, Liberty, CNA, Confederation Life) or changed its name and you're trying to track them down, here you go! The list is regularly updated. Last updated January 23, 2023.
  • Structured Settlement Quote Lock-Ins | What You Need To Know
    What does a Structured Settlement Lock-In Mean? How do plaintiffs, defendants and insurers benefit from a structured settlement quote lock in when finalizing a settlement? How does the defendant/insurer/court benefit from using a structured settlement lock-in? Where to be careful when using structured settlement lock ins.
  • What Are Structured Settlement Annuities?
    Structured settlement annuities are annuities that can provide one or more customized annuity payment streams in a single contract. Read about structured settlement annuities here.
  • History of Structured Settlements
    Tracing the roots of structured settlements history from 1918, when Congress exempted damages for personal injury or sickness from income tax, to the establishment of structured settlements as a core personal injury settlement planning tool to the present day.
  • What Are Market Based Structured Settlements?
    Market based structured settlements are an alternative or supplementary structured settlement solution for the plaintiff, attorney or law firm that: 1. Can afford to take some market risk 2. Have discretionary settlement dollars. Claimants and attorneys alike may find that market-based structured settlements provide the opportunity to receive tax-free income, or tax-deferred income, while enjoying growth potential.
  • iStructure |Uncapped Fixed Index Structured Settlement Annuity
    iStructure is an innovative game changing fixed index structured settlement annuity for plaintiffs or attorneys. with an intermediate to long term horizon

Qualified Settlement Funds

  • What is a Qualified Settlement Fund?
    Qualified Settlement Funds | What You Need to Know
  • Firmwide Qualified Settlement Funds Debunked
    Firmwide qualified settlement funds have been heavily promoted to trial lawyers, but have been debunked in a detailed analysis in a July 2022 legal opinion a tax partner at the law firm of Faegre Drinker Biddle & Reath, LLP. Trial lawyers and firms who have established Firmwide QSFs or coinsidering establishing a Firmwide QSF should read the analysis as part of their evaluation.

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Structured Settlement Best Practices Corner

  • New York Insurance Advertising law requires the full name of the Insurer to be listed along with the city and state of the principal office. Stating that you represent these fine companies using Insurance company logos without the preceding information are also illegal
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  • Be aware that financial advisors use of testimonials is prohibited or restricted
  • Most states require that Testimonials represent the CURRENT opinion of the person who made the testimonial. Be prepared to back it up.
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Why Take a Structured Settlement?

  • A structured settlement offers guaranteed financial security to personal injury victims, wrongful death survivors and their families. A structured settlement involves a customized stream of payments, provides long-term stable tax-free income, for a period of years or a lifetime. Unlike other income annuities. a structured settlement annuity can have multiple payment streams to address multiple needs in a single contract.

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