Structured Settlement Annuity Additional Resources - Page 10



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News About Settlements

* Did You Know?
  • Time value of money TVM - also called the discounted present value, is based on the premise that one will prefer to receive a certain amount of money today than the same amount in the future, all else being equal. Refers to effects of interest over time.
  • Example of an annuity - an individual would pay a lump sum or a series of payments (called premiums) to an insurance company, and in return receive a fixed income payable for the rest of their life.
  • A structured settlement must be established by - 1) A suit or agreement for periodic payment of damages excludable from gross income under Internal Revenue Code Section 104(a)(2)
  • Simple interest - interest that accrues linearly, growing by a certain fraction of the principal over equally-spaced time periods for the life of the loan.
  • Fixed deferred annuity - a deferred annuity which grows by interest rate earnings alone.

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