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Affidavit
A written statement made under oath.
Agent
A person/party that has the power or authority to act for or represent
another.
Annuitant
A person or measuring life entitled to receive benefits or a stream of
payments pursuant to the terms of an annuity contract.
Annuity Contract
Written agreement between an insurance company and an annuitant outlining
the obligations of each party and the specific details of the annuity,
including the future periodic payments the annuitant will receive as
specified in the Settlement Agreement and Release.
Assignee
A person or entity to whom an agreement, contract, title, claim, property,
interest, or right is transferred. For the purpose of structured settlements,
this is a third party who assumes the payment obligation of the structured
settlement from the Annuity Issuer.
Assignment
A transfer of some right, interest, or obligation from one person or entity
(the assignor) to another (the assignee) and the corresponding assumption
of that right, interest, or obligation by the assignee.
Assignor
A person or entity to whom is passing on and transferring an agreement,
title, claim, property, interest, or right. For the purpose of structured
settlements, this is the defendant and/or the defendant’s liability
carrier.
Beneficiary
The person(s) designated to receive guaranteed benefits if the annuitant
is not alive on or before the date the last guaranteed periodic payment
is to be made pursuant to the annuity contract.
Best's Financial Strength Rating (FSR)
The rating that A.M. Best & Company assigns to insurance companies
based on the company's financial strength and ability to meet its ongoing
obligations to its policyholders. A Best’s Financial Strength Rating
is an independent opinion, based on a comprehensive quantitative and
qualitative evaluation, of a company’s balance sheet strength,
operating performance, and business profile. Best assigns letters
to rate the financial strength and a roman numeral stands for the Financial
Size Category (FSC) to indicate the size of a company in terms of its
statutory surplus and related accounts. The highest rating category
is A++, XV (Superior).
Bond Simulation
In a structure context it refers to designing a cash flow to mimic a
bond in which a series of payments are made followed by a deferred lump
sum or balloon payment that is equal to the total cost of the structure.
Bonds
Debt issued for a period of more than one year. Bonds may be sold by
U.S. and local governments and agencies, or corporations. The issuer of
a bond is actually lending money to the bond purchaser in exchange for
repayment over time.
Case
A lawsuit or action in a court.
Certified Structured Settlement Consultant (CSSC)
A designation earned by a Structured Settlement Consultant after a battery
of complex courses are offered and then by passing examinations
by The University of Notre Dame and the NSSTA.
Class Action
A lawsuit filed by one or more people on behalf of themselves and a larger
group of people "who are similarly situated."
Complaint
The first document filed with the court (actually with the County Clerk
or Clerk of the Court) by a person or entity claiming legal rights against
another.
Constructive Receipt
When income has been credited to the taxpayer’s account, set apart
for the taxpayer, or otherwise made available so that the taxpayer may
obtain it at any time. Not constructively received if the taxpayer’s
control of its receipt is subject to substantial limitations or restrictions. The
purpose of the constructive receipt doctrine is to prevent taxpayers
from falsely influencing the timing of taxation by refusing to accept
income that was actually available to them.
Corpus
From the Latin word for "body." Refers to the principal amount
(usually money, securities, and other assets) of a trust or estate as
distinguished from interest or profits.
Costs
Expenses associated with prosecuting or defending a case in court. Usually
does not include attorney’s fees.
DOB
Date of birth.
Defendant
The party from whom the plaintiff is seeking damages.
EFT
Electronic funds transfer. For the purpose of a structured settlement,
the life company will transfer (wire or mail) the periodic payments directly
to the annuitant's bank account.
Estate Tax
A tax imposed by the state or federal government on the transfer of property
by inheritance before distribution to the heirs.
Grantor
The creator of a trust.
Guaranteed Benefit
A benefit term that guarantees that the annuitant and/or beneficiary,
as named in the contract, will receive payments. After the death of the
annuitant, any remaining guaranteed benefits are then paid to the beneficiary
until such time all scheduled payments are satisfied.
Guardian
A person who has legal authority and duty to care for an individual and/or
manage the rights and property of that individual because they are incapable
of taking care of their own affairs.
Guardian Ad Litem
An individual appointed by the court to represent the interests of a
minor or incapacitated person only during the duration of the lawsuit.
Internal Rate of Return (IRR)
An interest rate that is equivalent to the returns (on the amount of
premium).
Internal Revenue Code (IRC)
Federal law governing income taxation.
Internal Revenue Service (IRS)
United States government agency that collects taxes and enforces the
tax laws. It is a part of the Department of the Treasury.
Irrevocable Trust
A permanent trust. Once created, the trust cannot be revoked, amended,
or changed in any way.
Judgment
A ruling or order of the court.
Life Care Plan *
A dynamic document based upon published standards of practice, comprehensive
assessment, data analysis and research, which provides an organized,
concise plan for current and future needs with associated costs, for
individuals who have experienced catastrophic injury or have chronic
health needs. The plan addresses medical, housing, transportation, and
other expenses that will be incurred by the seriously injured individual
throughout the course of his/her life.
Lump Sum Annuity
An annuity designed to make a single payment on a specified future date
or series of balloon payments on specified future dates.
Medicaid
A program in the United States that pays for medical assistance for certain
individuals and families with low incomes and resources. This
program is jointly funded by the states and the federal government
and designed to reimburse hospitals and physicians for providing care
to eligible people who cannot finance their own medical expenses.
Medicare
A program under the U.S. Social Security Administration that reimburses
hospitals and physicians for medical care provided to eligible people
over 65 years old, some people under 65 years old with disabilities,
or people with end-stage renal disease.
Minor
Any person under the age of eighteen (18) years.
National Structured Settlement Trade
Association (NSSTA)
An organization based in Washington, D.C. of more than 600 members who
provide structured settlements to resolve physical injury and workers
compensation claims.
Net Present Value
The present value of an investment future net cash flows minus the initial
investment. NPV is one of the most robust financial evaluation tools
to estimate the value of an investment or financial proposal.
Normal Life Expectancy
The normal (or average) age to which a person is expected to live from
his/her current age. Based on various statistical analyses and used
by insurance companies to set prices and to make benefit projections.
Period Certain
Also referred to as “guaranteed or term certain payments.” Payments
that are not contingent upon the life expectancy of the annuitant. If
the annuitant dies prior to the last guaranteed payment, then the remaining
guaranteed payments will be distributed to the annuitant’s beneficiaries.
Plaintiff
A person or entity that brings a legal action and seeks compensation
for injuries suffered from another party.
Qualified Assgnment
A transfer of a future payment obligation by a defendant or insurer to
an assignee pursuant to IRC Section 130.
Rated Age
Certain medical conditions and injuries can result in a "rated age" or "impaired
risk rating" or "substandard age rating." An underwriter
of a life company evaluates and estimates that, due to the substandard
conditions and/or injuries, that the annuitant may not live a normal
lifetime and it is therefore willing to accept the risk of providing
lifetime payments at a lower annuity premium cost than would otherwise
be required. The annuity premium and benefits are quoted at the rated
age, as if the annuitant's age is the rated age instead of the annuitant's
actual normal or standard age.
Rating Agencies
Rating agencies provide formal opinions with regard to an insurance company
that are of importance in measuring how effectively and profitably
a particular company is likely to perform in the future and/or meet
its obligations. The major rating agencies are A.M. Best & Co.,
Standard & Poors (S & P), Fitch, Moody's, and Weiss Research.
There may be a difference in approach between rating agencies but factors
generally considered include company profitability, liquidity, investment
strategy, surplus position, business practices, and capability of management.
Companies pay to get rated by all agencies with the exception of Weiss
Research.
Settlement Agreement
A legal instrument executed by parties to a lawsuit or claim which states
the case facts and the terms by which the plaintiff//claimant is releasing
the defendant and the defendant’s Insurer. The payments
to be made by the defense, the purchase of the annuity, and consent
language for the assignment may appear within the document as well.
Social Security Disability Insurance
(SSDI)
Program financed with Social Security taxes paid by workers, employers,
and self-employed persons. To be eligible, the worker must earn
sufficient credits based on taxable work to be “insured” for
Social Security purposes. Disability benefits are payable to blind
or disabled workers, widow(er)s, or adults disabled since childhood,
who are otherwise eligible. The amount of the monthly disability
benefit is based on the Social Security earnings record of the insured
worker.
Special Needs Trust
A trust created for an injured party's supplemental needs to preserve
the party’s eligibility for SSI and Medicaid.
Structured Settlement
An arrangement which is established by
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(i) A suit or
agreement for the periodic payment of damages excludable from the gross income
of the recipient under IRC Section 104(a)(2), or
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(ii) an agreement
for the periodic payment of compensation under any workers' compensation
law excludable from the gross income of the recipient under section 104(a)(1),
and under which the periodic payments are-- |
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(i)
of the character described in subparagraphs (A) and (B) of section 130(c)(2),and |
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(ii)
payable by a person who is a party to the suit or agreement or to the workers'
compensation claim or by a person who has assumed the liability for such periodic
payments under a qualified assignment in accordance with section 130. |
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Supplemental Security Income (SSI)
The SSI program provides monthly income to people who are age 65 or older,
or are blind or disabled, and have limited income and financial resources.
Effective January 2006, the SSI payment for an eligible individual
is $603 per month and $904 per month for an eligible couple. If you
are married, and only one person is eligible, a portion of your spouse's
income may be counted. In addition, your financial resources (savings
and assets you own) cannot exceed $2,000 ($3,000 if married). You can
be eligible for SSI even if you have never worked in employment covered
under Social Security.
Trust
A fiduciary relationship which calls for the trustee to hold title to
an asset for the benefit of the trust beneficiary. The grantor is the
person who creates the trust and may or may not be the beneficiary.
W-9
Internal Revenue Service Form W-9 Request for Taxpayer Identification
Number and Certificationis used to certify under penalties of perjury
that your social security number is correct and that you are not subject
to backup withholding. If you fail to make this certification on a Form
W-9, or similar statement, backup withholding may begin immediately on
your new account. The backup withholding tax rate is 28%.
Learn more by contacting ROBINYOUNG & COMPANY.
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