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Structured Settlement Rates
Structured Settlement Rates are a vital part of the whole process of pricing structured settlements, structured-sales, secured installment sales of real-estate or businesses, and non-qualified structures utilized for non-qualified assignments. Issuers of annuities circulate book rates, which are subject to change depending on market-conditions.
These rates will vary amongst carriers according to the company issuing the annuity and there investments, surplus position, reserve statutory-guidelines, and their accepted business model, including if there is a “rated-age” and other considerations. Structured Settlement Brokers that have the connections, can shop the market for the most competitive rates.
Daily Structured Settlement Rates Vary
These structured-settlement book-rates are responsibly set in consideration of the huge flow of money, and must be in keeping with statutory guidelines in many states requiring the matching of assets to liabilities. Daily structured settlement rate pricing is offered by most carriers. During the negotiations of a structured settlement offer, the broker will often bring the proposal to an annuity issuer or issuers, to attempt to get a better deal than the book rates.
This is not so easy in an atmosphere of declining interest rates. Sometimes the spot rates in the bond-market will provide a better daily rate of pricing. Depending on the issuer of the structured-settlement annuity, the minimum premium for a structured-settlement daily-rate-pricing will range from “None” to $2M. These daily-rates can be extended until noon of the next business day up to ten days, although most are good only until the end of the next business day.
If a case settlement is ongoing, some carriers will consider an extension when requested. Greater extensions will be granted by some carriers in cases with structured-settlement annuity premiums over $3M. The use of daily-rate pricing may make the difference while negotiating disputed issues of damages. They can also be used to enhance the policy value limits offer when the defendant has limited-coverage and no assets.
What is meant by “Rated Age” ?
This is where you can use negative medical reports to your advantage. When figuring the cost of a structured-settlement, the life expectancy of the Plaintiff is an important consideration. This is true where the payments are due over the life of the Plaintiff, or even if the payment is a “life-contingent” lump-sum that is deferred. The cost for such an annuity is affected by sex, age and the extent of the injuries to the plaintiff.
There are certain enumerated medical-conditions and injuries which can result in a rated-age or impaired-risk-rating when an underwriter at the life insurance company issuing the annuity thinks that the Plaintiff may not live a normal lifetime, and is willing to bear the risk of giving the lifetime payment flow at a lower annuity-premium cost. The quote on the annuity is based as if the rated-age is the Plaintiff’s age.
The risk that the life insurance company assumes can be a large benefit to a Plaintiff with a lifetime of medical requirements, and/or a need for a lifetime income stream.
As you can see, Structured Settlement Rates can be very involved and complicated, and this is exactly why I always recommend the guidance of a firm like Einstein Structured Settlements.