Plaintiff lawyers can increase their return on structured attorney fees by using life insurance in a product arbitrage. Those attorneys who are interested in lifetime structured legal fee annuity payments often structure their fees with a guaranteed or certain period. Generally, the guarantee or certain period provides that any unpaid certain payments that remain after the attorneys death are to be paid, when due, to the beneficiaries of the plaintiff attorney.
At certain ages the spread between lifetime only and lifetime with period certain is so great that If the attorney is insurable, at a favorable rate, a term or no lapse guarantee universal life policy can be purchased within the differential. For example for
Age Annual Premium for $500,000 20 year term (in best underwiting category)
Male 65 $4,735
Male 70 $8,050
Female 65 $3,210
Female 70 $5,175
Life insurance proceeds are generally income tax free.
Using life insurance to enhance structured attorney fees may offer more benefits to the attorney and significantly more to his/her family than simply the structured attorney fee with a guarantee or certain period.
In “A Ladder of Annuities Can Hedge Your Bets” (Kiplinger’s Retirement Report, November, 2009, p. 6), Managing Editor Rachel L. Sheedy asserted that “laddering” annuity purchases (i.e. regularly buying annuities over time as opposed to a single annuity) helps achieve an optimal balance of return and hedge against inflation for those seeking retirement security. A 25-Year MassMutual Financial Group study described in the article, compared and contrasted several retirement-income strategies only to conclude that the laddered annuity approach returned 67% more money over that span than the traditional stock/bond portfolio and was the highest performing strategy overall.
For more details please contact John Darer at 4structures.com, LLC Toll free 888-325-8640
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