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March 04, 2017

Structured Settlement Annuity | Certain vs Guaranteed

by John Darer CLU ChFC MSSC RSP CLTC

The words "certain" and "guaranteed" are common terms used in settlement documents to describe payment obligations, and in structured settlement annuities and other income annuities. Both are often used in a way that suggests the terms are synonymous, but are they synonymous? Is there any potential for confusion down the road?

Let's consider one of the most common types of structured settlement payments

Certain period and life.  A certain period  provides that payments will be paid for life, but at least for a minimum certain period of time whether or not the measuring life is alive when the payment is due.  So if your structured settlement has monthly payments for life with 30 years certain it means that payments will be made for 30 years (360 monthly payments), whether or not you as the measuring life are living and then only if you are living from month 361 onward. 

The certain period starts when the first payment of the annuity payment stream begins.  There is no new certain period if the original measuring life dies and a beneficiary starts receiving the annuity payments.  For example  if you have a 30 years certain  and life annuity and the measuring life dies 15 years from the start of that payment stream, then 15 years (180 monthly payments) will be paid to the named beneficiaries.

Where could use of the term "guaranteed" create confusion?

All structured settlement payments are contractually guaranteed, even where they are life contingent.  For example, if you are receiving payments from a 20 years certain and life annuity and it has been 22 years since payments began, the remaining payments are contractually guaranteed to be paid for the rest of your life (after which payments will stop).   But the life contingent payments are not guaranteed to be paid whether or not the measuring life survives the entire payment schedule.

Berkshire Hathaway Structured Settlements, through its underwriting companies, Berkshire Hathaway Life Insurgence Company of Nebraska, First Berkshire Hathaway Life Insurance Company and National Indemnity Company, uses the term "certain" instead of "guaranteed" in its structured settlement quotes and contracts even refer to a lump sum payment as "certain lump sum".

Posted at 12:17 PM in Albany New York Structured Settlements, Annuity FAQ, Berkshire Hathaway Structured Settlements, Boca Raton Florida Structured Settlements, Boston Structured Settlements, Bowling Green Kentucky Structured Settlements, Bridgeport Structured Settlements, Bronx New York Structured Settlements, Brooklyn New York Structured Settlements, Broward County Structured Settlements, Buffalo New York Structured Settlements, Chicago Illinois Structured Settlements, CT Structured Settlements, Dallas Fort Worth TX Structured Settlements, Detroit Michigan Structured Settlements, Florida Structured Settlements, Hartford CT Structured Settlements, Jacksonville Florida Structured Settlements, Kings County Structured Settlements, Long Island NY Structured Settlements, Los Angeles CA Structured Settlements, Maryland Structured Settlements, Missouri Structured Settlements, NC Structured Settlements, New Haven CT Structured Settlements, New Jersey Structured Settlements, New York City Structured Settlements, New York Personal Injury, New York Settlement Planning, New York Structured Settlements, Newburgh Structured Settlements, NH structured settlements, NJ Structured Settlements, Norwalk Structured Settlements, NYC Structured Settlements, Orange County Structured Settlements, Palm Beach Structured Settlements, Pasadena Structured Settlements, Providence Rhode Island Structured Settlements, Rhode Island Structured Settlements, Rochester Structured Settlements, Sacramento Structured Settlements, San Diego Structured Settlements, San Francisco Structured Settlements, Seattle Structured Settlements, Structured Settlement Terminology, Westchester Structured Settlements, White Plains Structured Settlements, Wisconsin Structured Settlements, WV Structured Settlements |

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Guide to Structured Settlements 2024

  • 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 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
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    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].
  • Top Structured Settlement Annuity Companies 2024
    Which life insurance companies issue structured settlement annuities in 2024? 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. Last updated June 14, 2024
  • 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 2024
    Ways You Can Structure Your Settlement Payments in 2024. 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 Attorney 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 capped or uncapped index linked structured settlement annuities where payments are adjusted based on upside changes in the S&P 500 or another index, 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 in 2024.
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    Receiving structured settlement payments from your own structured settlement or inherited structured settlement? You'll like this huge time saver. Click the title for a link to 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), oran annuity issuer has changed its name and you're trying to track them down. Here you go! The list is regularly updated. Last updated May 20, 2024.
  • 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
  • Structured Settlements and Longevity Risk| What Are the Odds?
    Do your financial resources give you enough road, or will the road run out before you do? A structured settlement annuity helps mitigate the risk of outliving your savings, no matter how long you live. A structured settlement can include one or more customized payment streams and types.

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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