by John Darer® CLU ChFC MSSC CeFT RSP CLTC
A rated age is an important component of structured settlement pricing when there are life contingent payments
Such as:
- Pricing out and funding a life care plan
- Providing a backstop to a special needs trust or to an investment strategy
- Funding a Structured Medicare Set Aside Arrangement (MSA) at the maximum discount.
- Funding the temporary life elements of a New York CPLR 50A or 50B structured judgment such as future pain and suffering, or future medicals in excess of statutory thresholds.
- Funding lifetime retirement benefits or any other lifetime payment stream
- Longevity Insurance
Where acting your age (or less) results in more expensive pricing!
Structured settlements are one of those rare places where acting your age—or younger—can actually cost you more! Your virtuous lifestyle rewards you with a longer life, but also a pricier life-contingent annuity. Not that this is a call to dive into a triple cheeseburger and fries with all the trimmings (seriously, have some more kale).
To get the best rated age, it’s a good idea to have the structured settlement consultant review the medical records before sending them to the annuity issuer. This can help cut out duplicate reports and highlight key details for the underwriter to consider.
Period certain payments and guaranteed lump sum payments are not affected by rated ages.
This is because such payments are assured regardless of whether the payee lives through the entire payment schedule.
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