In relation to the settlement, being on guard for potential exploitation when entering into a structured settlement would be considered very wise.
Excessive Commissions – For Insurance companies, annuities that come with the structured settlements can be very highly profitable, and more often than not, carry very large commissions. Ensuring that commissions charged in setting up a structured settlement don't consume an inappropriate percentage of its principal, would have to be considered as one of the most important on the structured settlement check list.
Overstated Value - Over stating the value of a structured settlement, after negotiating a particular settlement, is fairly common. The result is that the plaintiff, while accepting the settlement, agrees to a much lower dollar value than that agreed upon. Defendants have been known to supposedly pay the complete amount of the settlement, later acquiring significant reimbursements from the annuity companies used. Comparing the fees and commissions charged for similar settlement packages by various insurance companies should be looked into, This confirms the best value of the settlement. A plaintiff may wish to make it a condition of the settlement that the defendant will actually pay the full value of the settlement in setting up the structured settlement, and that any rebates received by the defendant for annuities included in the settlement be payable to the plaintiff.
Self-Dealing - Cases are also known, where the plaintiff's lawyer is also in the insurance business, setting up a structured settlement on a client’s behalf without disclosing that the attorney is purchasing the annuities from his own business, or is pocketing a large commission on the annuities. Accepting a referral fee in relation to the clients account is also known. This is done by referring the client to a particular financial planner to set up a structured settlement. It is good to know the financial interest the lawyer has in regards to the services sold or recommended.
Expectancy of Life – Unfortunate, yes, but receiving a large personal injury or workers' compensation settlement means a shortened life expectancy as a result of their injuries. Life expectancy should be considered with any structured settlement and an annuity where payments will cease upon death should be considered. Sometimes it will make sense to insist upon an annuity that pays a minimum number of payments, or one that will pay a balance into the plaintiff's estate, such that the value of the settlement is not lost to an insurance company upon the plaintiff's untimely death.
Using Multiple Insurance Companies – Purchasing annuities for a structured settlement from several different large companies, dividing the settlement for larger settlements, makes sense in the case of a large settlement. This provides one with protection in the event that a company that issued annuities for your settlement package goes into bankruptcy - even in the event that one of the companies defaults in part or in full on your settlement payments, you would still receive full payment from the other companies.
Excessive Commissions – For Insurance companies, annuities that come with the structured settlements can be very highly profitable, and more often than not, carry very large commissions. Ensuring that commissions charged in setting up a structured settlement don't consume an inappropriate percentage of its principal, would have to be considered as one of the most important on the structured settlement check list.
Overstated Value - Over stating the value of a structured settlement, after negotiating a particular settlement, is fairly common. The result is that the plaintiff, while accepting the settlement, agrees to a much lower dollar value than that agreed upon. Defendants have been known to supposedly pay the complete amount of the settlement, later acquiring significant reimbursements from the annuity companies used. Comparing the fees and commissions charged for similar settlement packages by various insurance companies should be looked into, This confirms the best value of the settlement. A plaintiff may wish to make it a condition of the settlement that the defendant will actually pay the full value of the settlement in setting up the structured settlement, and that any rebates received by the defendant for annuities included in the settlement be payable to the plaintiff.
Self-Dealing - Cases are also known, where the plaintiff's lawyer is also in the insurance business, setting up a structured settlement on a client’s behalf without disclosing that the attorney is purchasing the annuities from his own business, or is pocketing a large commission on the annuities. Accepting a referral fee in relation to the clients account is also known. This is done by referring the client to a particular financial planner to set up a structured settlement. It is good to know the financial interest the lawyer has in regards to the services sold or recommended.
Expectancy of Life – Unfortunate, yes, but receiving a large personal injury or workers' compensation settlement means a shortened life expectancy as a result of their injuries. Life expectancy should be considered with any structured settlement and an annuity where payments will cease upon death should be considered. Sometimes it will make sense to insist upon an annuity that pays a minimum number of payments, or one that will pay a balance into the plaintiff's estate, such that the value of the settlement is not lost to an insurance company upon the plaintiff's untimely death.
Using Multiple Insurance Companies – Purchasing annuities for a structured settlement from several different large companies, dividing the settlement for larger settlements, makes sense in the case of a large settlement. This provides one with protection in the event that a company that issued annuities for your settlement package goes into bankruptcy - even in the event that one of the companies defaults in part or in full on your settlement payments, you would still receive full payment from the other companies.
Taken from the ExpertLaw Library http://www.expertlaw.com/library
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