by John Darer CLU ChFC MSSC RSP CLTC
Structured attorney fees are a tax deferral option available to personal injury lawyers and one of several attorney fee deferral options we offer in addition to more traditional attorney fee deferred compensation. [ see Attorney Fee Deferral]
Are lawyers eligible for a rated age when structuring attorney fees over the course of their lifetime?
A rated age is a pricing factor for annuity-funded structured attorney fees, wherein the life insurance company underwriter determines that the attorney has a shorter than average life expectancy. As a result, more favorable pricing can be applied based on the higher rated age rather than the attorney’s actual chronological age.
Just a Few Companies will consider Rated Ages for Annuities Funding Structured Attorney Fees
American General Life Insurance Company and United States Life Insurance Company in the City of New York (US Life) will consider medical documentation outlining an attorney’s current medical condition and current prescriptions to provide a rated age. American General and USLife are two on a shortlist of three structured annuity issuers at this time offering medical underwriting on trial lawyers. .
In addition to the two Corebridge subsidiaries, The Prudential Insurance Company of America will also consider medical documentation outlining an attorney’s current medical condition and current prescriptions to provide a rated age
Structured Attorney Fees Can Help Address Longevity Risk
Longevity is a guessing game. A lifetime structured settlement annuity funded structured attorney fee is an option for a lawyer to address longevity risk. To the extent a trial lawyer structures a portion of his or her attorney fees over a lifetime, mortality risk can be shifted to the annuity issuer. It can be used as a financial backstop. Putting things into perspective on the topic of longevity, Corebridge’s New York underwriting company US Life has been in business since the 1850 and Prudential since 1875 which, taking into account shifts in mortality over time, is in the realm of three normal human life expectancies!
Rated Age May (or May Not) Produce the Best Price
Just like when pricing structured settlement annuities for plaintiffs, having a rated age doesn’t necessarily mean you’ll get the best deal.
- Rated ages only affect life contingent payments.
- Rated ages do not affect period certain payments or guaranteed lump sum payments.
- When figuring out the cost of a specific payment stream, the rated age is matched to the annuity issuer’s current rate series. Depending on both the rated age and the rate series, a company without a rated age might still offer competitive pricing.
If you would like to explore attorney fee deferral options or have any questions feel free to call me at 888-325-8640