Summit Structured Settlements
755 S.E. Frontier Suite 101
Waukee, Iowa 50263
Voice: 515.987.6888
Fax: 515.987.6999
Toll Free: 866.267.1177
info@summitsettlements.com
Disclaimer
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Glossary Annuitant
- The person entitled to receive annuity payments or who now receives them.
Annuity - The contract between the owner and the life insurance company to
provide payments to claimants.
Annuity Certain - Annuity designed to make payments for guaranteed period of
time. Payments may be made periodically such as weekly, monthly or annually.
Payments may also be made immediately or deferred, i.e. beginning 07/01/2010,
$1,000 per month for 10 years certain. Also known as period certain.
Annuity with Compounding Benefits - Annuity that increases at a fixed percentage
computed on previous year's payments. Frequently expressed as an addition to an
annuity, i.e. with 3% compounding annually.
Assignee - A person or entity to whom legal liability is transferred for an
obligation.
Beneficiary -A named person (heir), a person(s), estate, or financial
instrument (for example, a trust fund), named in the policy as the recipient of
the guaranteed payments in the event of the policyholders death. Also known as
cotingent payee.
Benefit - An amount payable from an annuity by the insurance company or the
self-insured entity to a claimant or beneficiary.
Cash Refund - Lifetime annuity with guaranteed benefit equal to the premium
amount. Commonly used for Workers' Compensation cases. Beneficiary is the
casualty company.defendant. The balance of the premium (after all payments made) is
deducted and returned to the casualty company in a cash lump sum.
Certain and Life Annuity - Annuity designed to make payments for the life of the
annuitant with specific number of years guaranteed, regardless of life or death.
Payments may be made periodically such as monthly or annually. Payments may also
be made immediately or deferred, i.e. beginning 04/01/2010, $2000 per month for
15 years certain and life.
Claim - A claim is a demand by a person or entity that is seeking to recover for
a loss. A claim may be made against an individual or an entity. A claim may also
be made against an insurance company, when an insured asks the insurance company
to pay for a loss that may be covered by an insurance policy.
Claimant - A person(s) who asserts a demand seeking to recover for a loss and
who is the recipient of the structured settlement.
Constructive Receipt - Per the Internal Revenue Code, money representing income
not actually received or in the possession of the taxpayer may be considered
received as income and therefore taxable. Constructive receipt is said to have
occurred if that income is credited to the taxpayer without a restriction on the
taxpayer's right to bring that income within his control.
Contingent Payee - The person(s), estate, or financial instrument (for example,
a trust fund), named in the policy as the recipient of the guaranteed payment in
the event of the policyholder's death. Also known as beneficiary.
Deferred Annuity - Annuity in which payments begin at a stated time in the
future.
Education Fund - Funds paid over a specific period, usually starting at age 18
and continuing through typical educational or vocational training years.
Employment Claim - Examples of employment claims might be related to wrongful
termination, sexual harassment, wrongful discipline, failure to employ or
promote, or discrimination.
First Payment Date - Date payments begin for the entire settlement or for the
annuity chosen.
General Liability - For the most part, claims for injuries or damage caused by
ownership of property, manufacturing operations, contracting operations, sale or
distribution of products, and the operation of machinery, as well as
professional services.
Guaranteed Benefit - Payments made regardless of whether the annuitant is living
or deceased.
Injured Party - A person (or persons) who is the recipient of the legal action
and receives the benefit of the resulting structured settlement.
Installment Refund - Lifetime annuity with guaranteed benefit equal to the
premium amount. Commonly used for Workers' Compensation cases. Beneficiary is
typically the casualty company and payments are made in installments as
designated in the annuity.
Joint and Survivor Lifetime Annuity - An annuity designed to provide payments
for two annuitants whether living or deceased. May be a guaranteed period and
the percent of payment received upon the death of one annuitant may vary.
Payments may be periodically, immediately or deferred, i.e. beginning
07/10/2010, $3000 per month for 15 years certain and life, 100% joint and
survivor).
Last Guaranteed Payment Date - Date when final guaranteed annuity payment is
made for a lifetime annuity with a period certain.
Last Payment Date - Date when final annuity payment will be made for a certain
only annuity.
Life Insurance Company - A company that provides the annuity policy, i.e. AIG
American General Life, Hartford Life, New York Life. Also known as annuity
issuer.
Life Only Annuity - Annuity with payments that continue only during the life of
the annuitant. There is no other guarantee and payments cease at death.
Lifetime Annuity - An annuity designed to make payments for the life of the
annuitant only. Payments may be made periodically such as monthly or annually.
Payments may also be immediately or deferred, i.e. beginning 07/01/2010, $1500
per month for life.
Lump Sum Annuity - Annuity designed to make a single payment on a specific date.
Medical Malpractice - A term used to describe claims resulting from improper
medical care or treatment resulting in a significant deterioration of a person's
health status caused by a medical practitioner (such as a doctor, hospital, or
other medical provider) who did not follow generally recognized medical practice
standards.
Medical Trust - Trust account from which medical expenses are paid for the
annuitant.
Normal Life Expectancy - Age to which a person is expected to live from their
present age. Figure is based on statistics gathered by the life insurance
companies.
Period Certain - Annuity designed to make payments for guaranteed period of
time. Payments may be made periodically such as monthly or annually. Payments
may also be made immediately or deferred, i.e. beginning 07/01/2010, $1,500 per
month for 10 years certain. Also known as period certain.
Periodic Payment Act of 1982 - Also known as Public Law 97-473. Various tax
rulings were brought into statutory certainty and added Section 130 to the
Internal Revenue Code that authorized qualified assignments.
Personal Injury - An injury to a person's body or mind. An injury to a person's
body is considered a physical injury. Examples are: a sickness resulting from an
injury, loss of limb, a dog bite, or one's life. A personal injury of the mind
might be such as defamation of character or wrongful termination.
Plaintiff - A person or entity that brings a legal action against another party
and that is seeking some kind of legal remedy to the situation from the accused
party (defendant).
Premium – Total cost of the annuity portion of the settlement.
Proposal - Structured settlement package presented to the client as a suggested
solution for settlement.
Qualified Assignment - The term means any legal transfer of a liability to make
periodic payments as damages on account of personal injury or sickness in a case
involving physical injury or physical sickness if a) the transferee assumes the
liability from a person who is a party to the suit or agreement; b) the periodic
payments are fixed and determinable regarding amount and time of payment; c) the
periodic payments cannot be accelerated, deferred, increased, or decreased by
the recipient of such payments; d) the assignee's obligation is no greater than
the obligation of the person who assigned the liability; and e) the periodic
payments tax-free to the recipient under section 104(a)(2).
Qualified Funding Asset - Annuity or U.S. government obligation purchased in
accordance with Section 130 of the Internal Revenue Code.
Quote - Price given by a life insurance company for specific annuitant and
benefit package. Section 104(a)(1) - Part of the Internal Revenue Service Code
that allows monetary amounts received under workers' compensation claims to be
excluded from the gross income amount on a person's tax filing. Section
104(a)(2) - Part of the Internal Revenue Service Code that allows monetary
amounts received for physical injury or sickness to be excluded from gross
income amount on a person's tax filing. Section 130 - Part of Public Law 97-473
that amended the Internal Revenue Code of 1954 to allow qualified assignments to
third parties to be responsible for making payments to claimants on cases
involving physical injury or sickness. The law allows the assignee to pass the
payments to the recipient(s) tax-free.
Settlement Agreement - Legal document executed by all parties of a lawsuit or
claim stating case facts and terms by which plaintiff releases the defendant.
Payments made by defendant, purchase of annuity and consent language for the
assignment may appear within the document as well.
Single Premium Deferred Annuity - Annuity purchased for a single premium with a
payout at a later date.
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