Frequently Asked Questions

FAQ

Structured Settlement vs. Bank Trust

What types of securities/insurance products support the payments?
Structured SettlementsBank Trust
A fixed annuity issued by a life insurance company. Assets are invested in the insurance company’s general account.For cases involving incompetent individuals, minors or serious injuries, investments may be restricted to federally insured products (i.e., Certificates of Deposit). For other cases, any investment may be used - fixed income, stocks, bonds, and mutual funds. These securities are not F.D.I.C. Insured.
Can this option provide a stable, lifetime income?
Structured SettlementsBank Trust
Yes. Payments and distribution schedule are determined up front. Can provide a dependable, predictable income stream that you cannot outlive.Any income or return will depend on the type and performance of the underlying investments.
Is there a guarantee with this option?
Structured SettlementsBank Trust
Yes. The annuity issuer guarantees payments according to the terms of the structured settlement agreement.Federal Deposit Insurance Corporation (FDIC) insures up to $100,000 on Treasuries and C.D.’s. Any other investments are NOT guaranteed.

What are the costs and fees associated with this option?
Structured SettlementsBank Trust
No cost to annuitant.Bank management fee of 101.25% asset value per year, every year. Transaction processing costs for securities purchases. Management fees from the various securities in which the Trust invests (i.e. 12(b) 1 fees on mutual funds).
Will this option keep pace with inflation?
Structured SettlementsBank Trust
Yes, with a Cost-of-Living-Adjustment (COLA) feature.It depends on the performance of the underlying securities.
What are the tax consequences?
Structured SettlementsBank Trust
Income provided by the fixed annuity is TAX-FREE, provided the damages received as periodic income (other then punitive damages) are the result of personal physical injuries or physical illness.All income generated is FULLY TAXABLE (except some income from tax-free Municipal Bonds). Capital gains taxes apply when securities are sold.
Is this option affected by market fluctuations? 
Structured SettlementsBank Trust
No. Benefit payments are determined and fixed at the time the annuity contract is issued.Payment amounts are fixed, but how long they last may be affected by the performance of the underlying securities.
Can I make changes to this option after I select it?
Structured SettlementsBank Trust
No. The payment amount and schedule are fixed and may not be changed or accelerated.No. The payment amount and schedule are fixed and may not be changed or accelerated.