Long Term Disability Cases

Long Term Disability Cases
For the claimant security and protection are assured:

* Payments guaranteed with a major insurer
* Leverages greater benefit payments through medical underwriting
* Receives tax-free income stream for a fixed period and/or life

For the defendant/insurer:

* Reduces costs without reducing benefits through the use of medical underwriting
* Reduces claims reserves by passing the risk to a third party
* Eliminates on-going administrative costs

Old Workers' Compensation Claims (pre-August 1997)
Structured settlements in workers' compensation claims provide security for the claimant:

* Guarantees a tax-free income stream designed to meet current and future needs
* Funds on-going medical or rehabilitation costs, as well as other financial obligations such as a dependent's college costs
* Provides worry-free investments at competitive rates of return

The employer/insurer:

* Eliminates the liability and payment obligation through a Non-Qualified Assignment
* Closes the case more quickly

Non-Bodily Injury Claims
Reducing taxes by deferring compensation over time allows the plaintiff to generate triple tax deferred interest: Money in a settlement annuity earns interest on funds that would have otherwise been lost to taxes in year of settlement. Triple tax deferred interest is earned on: 1) principal, 2) accumulating interest, and 3) taxes deferred at settlement.

The defendant can take a deduction for the cost of settlement in the year of settlement, and has no responsibility to guarantee the future performance of the life insurance company that issues the annuity.

Punitive Damages
Avoid the problem of a lump sum settlement exceeding the Alternative Minimum Tax (AMT) threshold by spreading the settlement payments over time. The defendant also benefits by being able to take a full deduction for the cost of settlement in the year of settlement while still allowing the plaintiff to defer taxation over time.

SPIA - Single Premium Immediate Annuities
This flexible annuity allows you to pace the use of your money to maximize the amount available to you and avoid living on a smaller income than necessary. An income schedule is tailored to meet your financial requirements. Payments can be fixed or have a pre-determined annual COLA, and can be designed to meet your present and future needs.

An SPIA provides:

* Flexible, easy-to-manage income
* Guaranteed income with no investment risk
* Financial security
* Payments that can be set up for a guaranteed fixed period and/or life
* Retirees with an income that will not run out later in life

Opinion on Single Claimant 468B Cases
Many major life carriers will not accept an assignment under Section 130 of the Internal Revenue Code from a Section 468B Qualified Settlement Fund (QSF) if there is a single claimant or single claimant family. Important issues of allocation and economic benefit preclude them from accepting assignments on single claimant 468B funds.

If there is only one claimant, an ipso facto prior allocation exists at the time of the creation of the Qualified Settlement Fund, since all of the money is paid on behalf of the sole claimant. This prior allocation would trigger economic benefit and thus taxation on the gain, and an inability to do a Qualified Assignment, under the requirement that all of the periodic payments must be entirely excludable, pursuant to IRC 130(c)(2)(D).