by Structured Settlement Watchdog
Who is Interstitial Man?
"Interstitial Man" is a new moniker for people that work as sales reps, or underwriters of structured settlement factoring companies cloaked as reps, who flit and float in and around the structured settlement factoring "interstitial" spaces with a sales pitch of word salads with homemade "everything croutons" on top.
Last week one such "Interstitial Man" named Aaron Davis, a Senior Underwriter at Legacy Capital, contacted a California structured settlement annuitant with a gaffe ridden miche mache, to be highlighted for educational purposes, the good of humanity and the titillation of connoisseurs of "Salade de mots" everywhere.
The "Spurious Case of Gwendolyn Glutton" Word Salad
Writes the Florida based Legacy Capital (Legacy-Funding.com) Senior Undewriter/Rep soliciting a California structured settlement annuitant...
"We show policy holders how they can "rewind time" and bring things back to when this settled. Giving you the option to choose between any products on the market to create a plan that can outpace your current policy by attaching a much more competitive interest rate".
My Thoughts
- Structured settlement annuitants are not policyholders. See "Faint Glimmer of Hope Extinguished Word Salad" below.
- "Turn back time"?..."Bringing things back to when your case settled"? If you are receiving structured settlement established in 1990 with your parents or grandmother, the latter of whom has been deceased since 2004, are they saying they are going to bring her back. Are they going to bring the insurance company claims people, who have retired, back to work, if still living?
- is Legacy Funding somehow going to bring back the interest rates of 1990? Perhaps they're going to resurrect recently departed Irish crooner Sinead O'Connor, whose 1990 #1 song of the year could be paraphrased as Nothing Compares 2 U(r) 1990 Rates, while the #5 song by MC Hammer piles it on with "U Can't Touch This (1990 rates) in 2024. Especially so if those 2024 rates are taxable, because you sold your payment rights for pennies on the dollar and invested the proceeds in a taxable investment.
The Waldorf Word Salad
With no proof, the structured settlement factoring company representative's attempted hustle of the structured settlement annuitant is a figurative bowl of muddled sliced and diced fruit and homemade mayo. Check out this excerpt of Aaron's email:
"How much do insurance companies make on your money? Insurance companies make extremely lucrative returns on policyholders' money, simply because they have agreed to only pay a small amount of interest to the policy holder.
· Insurance companies make the market average if not more, which can exceed 10-12% .
· You annuity is only paying you a return of around 3%
· Following this math, your insurance company can be keeping 2x-4x more what you are receiving per month and per year".
Let's toss the fruit and the mayo! It's "Hammer Time"!
My thoughts:
- Structured settlement payees are not policyholders. Please see "Faint Glimmer of Hope Word Salad" below
- The Daikon radish Intertitial Man tries to pull for garnish, reveals a bit too much "Pecor-no-see-no" understanding of how insurers make money.
- If you are receiving payments from a long term fixed rate structured settlement annuity that was funded more than 30 years ago, Absent a COLA (and I'm not talking Pepsi or Coke here folks), I think you will find the monthly payment is still the same.
- What happens when you get a fixed rate mortgage? If you took out a 15 year fixed rate mortgage at 3.75% in November 2010 (as I did), the payments are still the same in 2024, even though an adjustable mortgage, or a new mortgage at the prevailing rates rate would bring higher in 2024.
- If you have a long term structured settlement that was issued in 1990, the internal rate of return of the structured settlement on the funding amount would have been locked-in somewhere north of 8.5%, income tax-free if payments represented damages on account of personal physical injury or physical sickness or otherwise satisfied IRC 104(a)(2). What is the taxable equivalent value of 8.5% income tax free? Better than 10-12% taxable depending on your tax bracket that the Waldorf Word Salad being served up. See Tax Advantages of Structured Settlements | Taxable Equivalent Yield Chart (4structures.com)
- A "return of around 3%" is an uninformed and deceptful approach by the Florida structured settlement factoring company representative.
The following references may also be helpful to readers for point #5:
US Treasuries Historical Interest Rates (ustreasuryyieldcurve.com)
Use to get an idea of where interest rates were at a point in time. Bear in mind that annuity issuers may hold difefrent types of bonds in their portfolio such as corporates which may yield more than Treasuries.
Historical mortgage rate trends | CNN Underscored Money
"A Faint Glimmer of Hope Extinguished" Word Salad
"One important thing to take from this is that you are NOT the owner of this policy. There was a law put in place many years ago by Congress to protect you from the insurance company that made themselves the owner of your settlement.It is called the Structured Settlement Protection Act. I would like to go over this law with you as well. "
My thoughts
- "Aaron", the Intertitial Man and sender of the email from legacy-funding.com, was just talking at the outset about what "rewinding time" for "policyholders". Seems like there are some signals crossed.
- What is a policyholder under Florida law? According to the Klotzman Law Firm in Hollywood Florida
Definition: A policyholder, in Florida, is an entity or individual who purchases and owns an insurance policy issued by an insurance company. The policyholder is the primary party involved in the insurance contract and is entitled to the benefits and coverage specified in the policy.
Ownership: The policyholder is the legal owner of the insurance policy and holds the right to make claims for benefits and exercise other rights and responsibilities outlined in the policy. See Policyholder (klotzmanlawfirm.com)
3. Aaron clearly lacks understanding of how a structured settlement is established, basic contract law (offer, acceptance, consideration), or sentence construction for that matter. Case in point "There was a law put in place many years ago by Congress to protect you from the insurance company that made themselves the owner of your settlement". Funny that there is one (or more) insurers that fund a settlement. Where there is a structured settlement, the annuity issuer is a life insurer.
Doesn't the United States have a bicameral Legislative Branch? Aaron's old enough to have seen Schoolhouse Rock's "How does a Bill become law?"
What about the 50 States and the District of Columbia's Structured Settlement Protection laws? See Structured Settlement Protection Acts (4structures.com)
4. Aaron's approach demonstrated a lack of understanding of what the Structured Settlement Protection Act is and its origins. But didn't he state that he had 15 years experience to the target of his solicitation. Go figure. The operative point is who is "target of his solicitation". The Structured Settlement Protection Acts are primarily to protect individuals who are receiving structured settlement payments as compensation for damages on account of physical injury or physical sickness, wrongful death or workers compensation from snake oil.
Examples of Who the Structured Settlement Protection Acts are Designed to Protect
The "Fuzzy Math" Word Salad
"One thing to note is that the longer the insurance company holds the lump sum, the more they will make over time. They will make over 20 million in 40 years while you only receive 1.5 million or less. That is not fair to you because you are the one who this money belonged to when the case was settled in court" -Aaron Davis Legcacy Capital (Legacy-Funding.Com) actually sent an email solicitation with this excerpt in it.
Let's see the back up Aaron!
Legacy-Funding.com is the website of Legacy Capital
We are not in the business of taking anything away from you** but more to provide clarification on the type of investment you were put in when your case was settled. We look at these policies from an investment lens and not how you may view it- we only say this because there are a lot of things that most people don't know about their annuity".
** except only pay you pennies on the dollar (sniffles)
Wonder why I would take the time to give a rat's a$$?
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