Having the information you need is important when it comes to making legal decisions for you or for someone you know. Understanding when to use a structured settlement and its advantages is critical. A helpful resource is www.milleniumsettlements.com.
See how structured settlements compare to other investments. Below is a chart regarding issues and concerns one may have.
EQUITY MUTUAL FUND
What types of securities/insurance products support the payments?
A fixed annuity contract issued by a life insurance company. Assets are invested in the insurance company's general account.
An investment company operates the fund,
pooling the assets of many investors and
investing in equity securities.
Can this option provide a stable, lifetime income?
Yes. Payments and distribution schedule are determined up front. Can provide a dependable, predictable income stream that you cannot outlive.
Historically, equities have shown the greatest potential
for long term growth. But they also entail a higher degree
of investment risk, which means they may not be a
reliable source for ongoing income needs. Earning
may stop together if fund performs poorly.
Is there a guarantee with this option?
Yes. The annuity issuer guarantees payments, as provided by the terns of the structured
No. Share prices and returns will fluctuate with
What are the costs and fees associated with this option?
No cost to the annuitant.
Management and expense fees cover the costs of
managing the fund and are deducted from returns.
Fund may also change a front-or back-end "load" (i.e. sales charge), redemption fees (paid by
investors when they "redeem" or sell shares) and
Will this option keep pace
Yes, with a Cost-of-Living-Adjustment (COLA)
Taxes must be paid as income is earned and distributed.
Capital gains or losses from sales of mutual fund shares
have additional tax consequences.
What are the tax consequences?
Income provided by the fixed annuity is TAX-FREE
provided the damages received as periodic income
(other than punitive damages) are the result of
personal injuries or physical illness.
Fund yield, share price and return will vary, depending
on market conditions. You may have a gain or a loss depending on market conditions. You may have a gain
or a loss, depending on when you sell your shares.
Is this option affected by
No Benefit payments are determined and fixed at
the time the annuity contract is issued.
Money can be withdrawn or moved form one mutual fund
to another. Charges, fees and taxes may apply to
Can I make changes to this option after I select it?
No. Payment amount and schedule are fixed and
may not be changed or accelerated.