Litigation

Life Settlements vs. Structured Settlements!

By John Darer

A website appearing high on search engine results, called the Structured Settlements Guide, is bloody useless, in my opinion. What purports to be an "on line informational guide to structured settlements" simply isn't. Today's Google alert on structured settlments informs us of its piece on "cash for life insurance". To clear up any confusion caused by these "fakers", here are a dozen talking points:

1. A structured settlement may be designed to pay for the life of the annuitant.
2. A transfer of structured settlement payment rights is not called life settlement
3. A transfer of structured settlement payment rights is called a structured settlement factoring transaction, a term that is defined under the United States Internal Revenue Code.
4. A transfer of life insurance payment rights is called a life settlement
5. Most structured settlements are funded with structured annuities as a "qualified funding asset"
6. Structured settlements which use annuities as "qualified funding assets" are manufactured by life insurance companies.
7. Structured settlements may also be funded with obligations of the United States Government as a "qualified funding asset". These are not manufactured by life insurance companies.
8. Life insurance policies are not funded with obligations of the United States government
9. When factoring companies or life settlement companies talk about "funding" they are not referring to a qualified funding asset. They are referring to the amount of money they will pay in "cash now" in return for the transfer of rights to receive the payments being transferred.
10. An active life insurance license is required to place structured settlement annuities.
11. In many states an active life settlement license is required to prosecute life settlement transactions.
12. Due a sustained overlook by regulators, unlike life settlements and structured settlements, people who do structured settlement factoring transactions need no license and are open to anyone and everyone without much regulation as to how such firms may advertise to consumers. Consumers are left to rely solely on the personal ethics of the practitioner and/or his/her firm and the level of knowledge and integrity of the judiciary who must approve such transactions.

Full post as published by Structured Settlements 4Real on April 03, 2008 (boomark / email).