Overcoming Objections to Structured Settlements RINGLER
10 9 8
“I can’t tell howmuch this proposal costs.” Many years ago it was thought that if the claimant knew the cost of the structure it would constitute “constructive receipt” and therefore void the tax-free nature of the settlement. It is clear that such knowledge and participation in the settlement design by the claimant does not void its tax-free status. All costs, guarantees, and expected payouts are clearly shown on all proposals. “You’re on the other side; this can’t possibly be good for me.” The structure broker assists in settlement discussion to help bridge the gap in negotiations, and to use the structured settlement concept to help match future needs with future guaranteed income. Structured settlement annuities are placed with a very select group of highly rated and regulated life insurance carriers, some of which have been in business for over 150 years. “My Client is too old for a structure.” Structured settlements are individually designed and therefore work for claimants of any age. Seniors are already typically living on a fixed-income. It is a natural fit to add guaranteed structure payments to Social Security, pension, and other retirement funds already being used. If properly designed, structures can eliminate the fear of outliving your retirement savings. “Structures are too complicated.” Once we have some basic claim data, and some general information about the claimant, we can very quickly and easily generate multiple customized proposals for any type of case or situation. When presented by a structured settlement professional, these designs can show the claimant several alternatives to all-cash that will stretch settlement dollars, and provide long-term security. We can also generate draft settlement documents for the parties to review once the case is settled. “We want to talk cash first, and then we’ll see about the structure.” As we stated in #10, all costs and benefits of the structure are disclosed in all proposal designs. The whole purpose of a structure is to match future expenses and needs with guaranteed future income. This can easily be done while still discussing the specific cash needs of the parties. Each structure benefit line shows the cost, the guarantee, and the expected payouts – so there is significant benefit to all parties to negotiate using this valuable planning analysis. “There’s not enough money to structure.” There are certainly cases where there is not enough money to address future needs via structure. However, our average case size is under $100,000.00 so that means that we structure a very large amount of small cases where there is limited money available in the settlement process. Sometimes a small portion can be set-aside in a structure for a specific purpose like a future surgery, a small college fund, or to replace monies taken out of a 401K or pension fund.
© Ringler 2017
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