Structured Insurance Settlement

The structured settlement broker sat back in the chair and began thinking back to the first day the client in front of her came in for a consultation. The man, forty four years of age, had won a ten million dollar law suit against a tobacco company for medical expenses, lost wages and future earning potential, plus pain and suffering for his terminal case of lung cancer. He would only be around for another nine months at the most, and had four children and a wife that would be left after the man's passing. The cancer patient had been a smoker since his teens, and a civil jury agreed that the company showed no compunction to stem the commercials aimed straight at teenagers when the man was an adolescent in the 1970's. Within weeks, the fortunate but unfortunate man would be receiving a check for ten million dollars and now there was the question of how to proceed. Would a structured insurance settlement be the right thing for the family, or should he take the lump sum?

The man's wife was very keen on taking the lump sum, for even after taxes, the spouse would receive almost six million dollars. But there was a gigantic fly in the ointment. The dear wife could spend money like it was water, and the husband could envision her blowing the entire amount in about five years, starting with a shoe collection rivaling the wife of the Philippine dictator from years past. Then it would be on to an Olympic size pool for the kids and the SUV guaranteed in its ads not to get over seven miles to the gallon. The man's wife was a wonderful person, but there was a seven inch hole in her purse. And the settlement conference was in two days.

The structured settlement broker offered to be at this conference which usually has a very specific shape. After both representatives of the plaintiff and defendant speak, each side is taken into separate rooms and the negotiations begin as to how the judgment money will be paid to the plaintiff. Moving between the two rooms is a mediator that will carry information back and forth between the two sides. The structured settlement broker would have time to sit and talk to the potential client about wishes and hopes for the future, serving as a representative in favor of the structured settlement option, and sharing during the hours of negotiation as to what choices the client might have as part of an ss agreement. So the decision came down to monthly payments to the man's wife that might help her better manage her money, or allow her to have a large and very tempting amount in the bank. Pictures of designer shoes kept popping in and out of his head as well as his family running out of gas on the highway in that much too impractical SUV.

After hours of agonizing mental and emotional gymnastics, the dying man decided on a structured insurance settlement instead of a lump sum payment. In this particular case, the tobacco company agreed to purchase an insurance annuity that would give the wife a monthly check for the rest of the spouse's life. In deference to her wishes, the husband did have as part of the settlement five hundred thousand dollars put into a one year CD so that she could have emergency money if and when needed. Ya just gotta think shoes! "But rather seek ye the kingdom of God and all these things shall be added unto you." (Luke 12:31)

The structured settlement broker often is a chartered life underwriter which is the one of the highest achievements a life insurance broker can attain. When the broker negotiates the purchase of a large annuity with an insurance carrier, there is often a fifty-fifty split in the commission rate between the broker and the annuity carrier. Of course, in the proper client-broker relationship, full knowledge of this transaction is given to the plaintiff before the agreement is finalized. And in a structured insurance settlement, the commission is figured into the judgment so that it does not affect the plaintiff's recovered money. A structured settlement broker can also design the settlement in such a way that minimal tax burden falls to the plaintiff.

Sadly, the husband died almost at the nine month mark. In the first few years after his death, the wife did to live on the twenty thousand dollars a month she received from the annuity, but the cost of remodeling plans could not be afforded on that monthly stipend. One day, while watching a favorite daytime show, the widow saw a television ad for a lump sum payment of the annuity. The woman called the offices of the firm that made the offer and found out she could take a structured insurance settlement factoring transaction, which meant the widow could sell the annuity and receive a lump sum payment. After all was said and done, the once six million dollar annuity had become a two and a half million dollar lump sum.

The settlement broker was driving one day and saw one of those ginormous SUVs alongside the road. Four children and a very despondent mother sat on the grassy apron. Out of gas. Again from what the children said. he woman stopped and gave them a lift to the gas station. The widow asked if it was possible to borrow twenty bucks for gas. The broker said sure, and drove away with a smile.

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