by Structured Settlement Watchdog
Sean Plummer's AnnuityExpertAdvice.com is sure giving Annuity.Org a run for its money for the leading spreader of ignorance about structured settlements. Plummer claims to have access to 1,421 annuity products and 3 product specialist teams. Maybe he should leave structured settlements to the pros.
Clearly on this showing Plummer is an unreliable source for structured settlement annuity expert advice.
- Plummer's plunge"Settlement income can not (sic) be altered due to market volatility". Well that sentence needs Roto Rooter!
- 40% of the structured settlement companies listed by Plummer haver never issued structured settlement annuities or no longer do so and have not done so for some time. Consider that 30% of their list hasn't written structured settlement annuities for 9 years or more.
- Plummer misrepresents the rate of return on structured settlements as 1% to 1.5% annually. Not only is that not current, but Plummer fails to account for products such as index linked structured settlements. Moreover, when one considers that a favorable IRS Private letter ruling was issued to Pacific Life for its ILAPA Rider in 2014 and that iStructure was rolled out by Independent Life Insurance Company in December 2021, Plummer is clearly uninformed.
- Plummer's plunge "Minors can also benefit from structured settlements. Yes, structured settlements hold many benefits for minors. However, the payments are primarily meant to fulfill the child’s needs until adulthood" Actually, there are many scenarios and Plummer has picked the least likely one. Read more about structured settlements for minors and young adults
- Plummer's Plunge "The Federal Periodic Payment Settlement Act of 1982 made it mandatory for court approval on all sales of structured settlements. No, it's not that. The Periodic Payment Settlement Act of 1982 was notable for establishing IRC 130, key to the process when a structured settlement is established. The Victims of Terrorism Tax Relief Act of 2001 established IRC 5891, which imposes an excise tax on the factoring discount of certain conditions are not satisfied. Two separate things.
- Plummer's plunge "Regular payments from structured settlement annuities are tax-free". A structured settlement is a form of settlement. Taxation of settlement proceeds in whatever form is driven by the type of damages the payment represents. An annuity is commonly (but not exclusively) used to fund settlement obligations that are paid in installments or periodic payments. Structured settlement annuities can be used to fund many different types of future periodic payment obligations, including obligations that may be represent taxable damages.
- Plummer's Plunge "Structured annuity contracts are protected by your state guaranty association, in which life insurance companies must set aside a reserve to the SGA in case of company insolvency". According to National Life and Health Guaranty Association (NOLHGA)
"State guaranty associations provide coverage (up to the limits spelled out by state law) for resident policyholders of insurers licensed to do business in their state. NOLHGA assists its member associations in quickly and cost-effectively providing coverage to policyholders in the event of a multi-state life or health insurer insolvency.
When an insurer licensed in multiple states is declared insolvent, NOLHGA, on behalf of affected member state guaranty associations, assembles a task force of guaranty association officials. This task force analyzes the company’s commitments to policyholders; ensures that covered claims are paid; and, where appropriate, arranges for covered policies to be transferred to a healthy insurer.
The task force may also support the efforts of the receiver to dispose of the company’s assets in a way that maximizes their value. When there is a shortfall of estate assets needed to pay the claims of covered policyholders, guaranty associations assess the licensed insurers in their states a proportional share of the funds needed".
Plummer's Plunge "If the annuity is set up for life contingent payments (life only, joint, and survivor), then typically, there is no death benefit. This exception would be if a guaranteed term (single or joint-life with a period certain) were put into place". You left the seat up on that one fella. Joint and survivor does not mean you smoked a blunt and you're still alive the next day. If brothers Mario and Luigi are receiving $5,000/month joint and 100% survivor means that $5,000/month will be paid by the annuity issuer until the death of last to die of Mario and Luigi. On Sunday morning Luigi was involved in a car accident while responding to a customer with "Dim Sump Pump failure". He later succumbed to his injuries. Mario will continue to receive $5,000/month until Mario dies.