Question 1

What is a Structured Settlement?

Accepted Answer

A structured settlement annuity is an innovative settlement planning tool utilized in personal injury, workers comp or wrongful death claims. It protects and strategically distributes a claimants’ compensation through a series of guaranteed, tax-free payments issued over time.

Question 2

I’m ready to go... How are my payments scheduled?

Accepted Answer

Once a structure is in place it cannot be altered. With that in mind a CMC Benefits Consultant will present plan options that will show any variety or combination of the following payment options: monthly, quarterly, semi-annually, annually, guaranteed for a certain period of years, lifetime monthly payments, a series of guaranteed lump sum payments, or one single lump sum.

Question 3

Can I still choose a structured settlement option once my settlement
agreement is finalized?

Accepted Answer

Unfortunately, no. The decision to utilize a structured settlement must be made prior to finalizing the settlement agreement. As your brokerage team, we will provide as many quotes as necessary to ensure you are comfortable with a payment arrangement before we finalize a plan. Our team will work with your legal representation to provide all the necessary language to be included in your settlement documents.

If your case is finalized, please contact us for more options.

Question 4

When should I engage a CMC Benefits as my settlement consultant?

Accepted Answer

As your consultant and brokerage team, we appreciate the opportunity to understand your individual needs as soon as possible so we can customize the most appropriate plan for you. However, as long as you case is not closed, we are available to run quotes same-day for a quick turnaround.

Question 5

How is my settlement consultant paid?

Accepted Answer

One of the many benefits of engaging a structured settlement consultant is that it will not cost you a dime. Settlement consultants are paid a commission through the life companies and do not charge a fee for service to you, the claimant, or to your attorney. CMC Benefit Solutions is not captive to any particular life company and will, therefore, quote through all the appropriate channels to ensure you get the best interest rate available for your settlement funds.

Question 6

Do I have to pay income tax on my structured settlement?

Accepted Answer

No federal, state or local income taxes are due on the entire amount of each structured settlement payment under current law (Section 104 (a) of the Internal Revenue Code and IRS Revenue Ruling 79-220). This tax advantage only applies if a structure is chosen at the time of the claim settlement.

Question 7

What are my options if I want to cash out my annuity?

Accepted Answer

Structured settlement annuities are designed with long-term goals in mind. They are build to garner tax-free growth paid out in a predetermined payment schedule. If you decide you no longer want to receive you money as scheduled, you may sell your annuity to a factoring company, however this is ill-advised. Most factoring companies will purchase your annuity for pennies on the dollar. In many circumstances, you will stand to lose roughy 90% of your guaranteed return. In some instances, court approval is required as well.

Question 8

Are structured settlements secure?

Accepted Answer

To assess a structure’s security, you should make sure that the insurance company issuing the annuity contract is financially sound. One way to do this is to look at the ratings given by A.M. Best, Standard & Poor’s, Moody’s and Fitch for that insurance company. These rating agencies specialize in analyzing the financial strength and dependability of insurance companies and are what we utilize in our quoting process to ensure the best company is chosen for your needs.

In the unlikely event that the annuity contract does not pay in full, the Assignment Company must make up any difference. Sometimes, a parent or affiliated company of the Assignment Company guarantees to make payments in full.

Contact CMC Benefit Solution Consultant for further detail if needed.

Question 9

What if the claimant of the structured settlement dies?

Accepted Answer

Upon the premature death of a claimant, any guaranteed payment predetermined in the annuity will continue to pay out as scheduled to the claimant’s designated beneficiary.

FREQUENTLY ASKED QUESTIONS