Forge Consulting LLC - Glossary - The Power of Structure

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A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Annuitant: The individual who receives or will receive the annuity payments.
Annuity: An insurance instrument that delivers fixed payments for a lifetime or a specified period of time.
Annuity certain: Annuity designed to deliver specified periodic payments over a guaranteed amount of time. Payments may be immediate or deferred. Also called a period certain.
Annuity with compounding benefits: This type of annuity increases at a fixed percentage based on the prior year's payments.
Assignee: An individual or entity to which legal liability for an obligation is transferred.
Beneficiary: The recipient designated in the insurance policy as the receiver of the guaranteed payment in the event of the policyholder's death. Sometimes called the contingent payee.
Benefit: The amount to be paid from the annuity to the claimant or beneficiary.
Cash refund: A lifetime annuity with a guaranteed benefit equal to the premium amount. The beneficiary is the casualty company. The balance of the premium (after all payments) is deducted and returned to the casualty company in a cash lump sum.
Certain and life annuity: An annuity designed to make specified periodic payments throughout the life of the annuitant with a guaranteed benefit in the event of premature death. Payments may be immediate or deferred.
Claim: A demand made by a person or entity seeking to recover a loss. Can be made against an individual or an entity, including an insurance company.
Claimant: A person who demands to recover for a loss and who is the recipient of the structured settlement.
Constructive receipt: 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 recipient designated in the policy as the receiver of the guaranteed payment in the event of the policyholder's death. Also called the beneficiary.
Deferred annuity: An annuity in which payments are postponed until a specified future date.
Education fund: Funds paid over a specified period, usually beginning at age 18 and continuing until training would typically be completed.
Employment claims: Claims involving wrongful termination, sexual harassment, wrongful discipline, failure to employ or promote, discrimination or other wrongful work-related loss.
General liability: Usually involves claims for injuries or loss caused by property owner, manufacturing operations, contracting operations, sale or distribution of products, and the operation of machinery, as well as professional services.
Guaranteed benefit: The minimum total amount guaranteed to be paid to a recipient and/or beneficiary.
Injured party: The recipient of the legal action and the receiver of the benefit of the resulting structured settlement.
Installment refund: A lifetime annuity that has a guaranteed benefit equal to the premium amount.
Joint and survivor lifetime annuity: An annuity that provides payments for two annuitants whether living or deceased.
Last guaranteed payment date: The date of the final guaranteed annuity payment in a lifetime annuity with a period certain.
Life insurance company: The company that provides the annuity policy. Also called annuity issuer.
Life only annuity: An annuity offering payments during the life of the annuitant only. Payments cease at death. Also called a lifetime annuity.
Lump sum annuity: An annuity that makes a single payment on a specified date.
Medical trust: Trust account from which the annuitant's medical expenses are paid.
Normal life expectancy: Statistically projected age to which a person is expected to live.
Period Certain: Annuity designed to deliver specified periodic payments over a guaranteed amount of time. Payments may be immediate or deferred. Also called an annuity certain.
Periodic Payment Act of 1982: Public Law 97-473. Authorized qualified assignments.
Plaintiff: The person or entity bringing legal action against another party.
Premium: The cost of the total annuity portion of the settlement.
Proposal: Structured settlement package presented as a suggested solution for settlement.
Public Law 97-473: Authorizes qualified assignments.
Qualified assignment: Any legal transfer of a liability to make periodic payments as reparation for 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; c) the periodic payments cannot be accelerated, deferred, increased, or decreased by the recipient; d) the assignee's obligation is no greater than the obligation of the person who assigned the liability; and e) the periodic payments are tax-free to the recipient under section 104(a)(2).
Qualified funding asset: An annuity or U.S. government obligation (bond) purchased in accordance with Section 130 of the Internal Revenue Code.
Reversionary trust: Account from which remaining amounts are paid back to the funding party at the termination of the trust.
Section 104(a)(1): The part of the Internal Revenue Service Code that allows monies received under workers' compensation acts to be excluded from the gross income on an individual's tax filing.
Section 104(a)(2): The part of the Internal Revenue Service Code that allows monies received for physical injury or sickness to be excluded from the gross income on a person's tax filing.
Section 130: Part of Public Law 97-473 that amended the Internal Revenue Code 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: A legal document that states the case facts and the terms by which plaintiff releases the defendant.
Single premium deferred annuity: An annuity purchased for a single premium with a payout at a later date.
Single premium immediate annuity: An annuity purchased for a single premium with an immediate payout.
Structured settlement: Settlement of a claim by means of fixed periodic payments.