ISettlement

Here we have compiled a glossary of terms covering both structured settlements and annuities to give you a comprehensive understanding of those components.

Annuitant

The term used to describe the annuity contract holder, i.e., the person who buys the annuity.

Annuity

A contract between a client and an insurance company where the client receives periodical settlement payments for a specified length of time.

Annuity with compounding benefits

An annuity where a fixed percentage of increase is added to each year of payment.

Beneficiary

A person or persons who “benefit” by receiving the payments of a policy holder who has died. This is also referred to as a “contingent payee.”

Benefit

Money paid to a policyholder by his or her insurance company.

Claim

A claim for a payment or payments from an insurance company by a policyholder.

Claimant

The person requesting for a payment or payments as a policyholder.

Contingent payee

A person or persons who “benefit” by receiving the payments of a policy holder who has died. This is also referred to as a “beneficiary.”

Defendant

A person or company defending legal action from any other person or company.

Deferred annuity

An annuity where payments are deferred until a predetermined point in the future.

Employment claim

A claim against an employer for wrongful dismissal, sexual harassment, racial prejudice or other such complaints.

Fixed annuity

A tax deferred annuity fixed at a rate of return during the term of the contract, usually until the annuitant dies.

Flexible premium annuity

A tax deferred annuity that allows for contributions at any time.

General liability

An insurance claim for damages or injuries resulting from patronage of a private company.

Guaranteed benefit

A structured settlement that guarantees the payments of money regardless of whether the claimant is living or dead. This is sometimes referred as a “lifetime annuity.”

Immediate Annuity

An annuity that starts paying out immediately, usually within one month of purchase.

Life only annuity

A structured settlement designed to pay-out only in the duration of a claimants life. Payments will cease if the claimant dies.

Lump sum

A one-off single payment in one lump sum.

Medical malpractice

The term used to describe improper medical treatment where the patient receives insufficient treatment to the detriment of the patient’s health, well being or even resulting in death.

Medical trust

An account operating as a trust which covers a claimant’s medical expenses.

Non-qualified Annuity

An annuity that is first subject to taxation.

Normal life expectancy

The age of which a person may be expected to live, based on life insurance actuarial tables.

Personal injury claim

A claim made by a person who has suffered personal harm or injury to the body or mind, including accidental injury or sickness.

Plaintiff

A person or company who takes legal action against any other person or company.

Premium

The total cost of an annuity contract.

Qualified annuity

An annuity that is not subject to taxation.

Quote

The set cost of an insurance policy determined by an insurance company.

Settlement agreement

A stage of settlement where all involved parties are in agreement with one another and satisfied with the outcome of the settlement.

Straight/straight life annuity

A tax deferred annuity fixed at a rate of return during the term of the contract, usually until the annuitant dies.

Structured settlement

A form of settlement that pays benefits in periodic installments instead of in one lump sum or a one-off payment.

Tax sheltered annuity

A tax-exempt annuity usually only offered to employees of tax-exempt organizations such as hospitals, schools and some charities for example.

Term certain annuity

An annuity where the term of the contract duration is specified and certain, i.e. for 10 years, or 15 years for example.

Variable annuity

An annuity contract that gives the client complete control over the annuity meaning he or she can spend the money on any number of different investments of his or her choice. This also means they are liable for all losses and not the insurance company.

Workers compensation

Payments paid to an employee or the employee’s beneficiary from the employer as a result of injury or death caused in the work place that is the fault of the employer.