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Thread: Insurance Settlement.

  1. #1

    Insurance Settlement.

    Hi, there.

    The auto insurance company is offering 0.8M for on-fault settlement in my 7-yr old son's case, while the no-fault is still ongoing, and we have 3 choices to accept this settlement. (we are in Ontario, CA)

    1) Lum sum, and the court would hold the money until my son's 18'th birthday, and the current interest rate is 3.25%, so by the time of my son's 18'th birthday, the court would give my son a big cheque which would be around 1.1M.

    2) Structured Settlement, which is our lawyer suggested, and we consultanted one broker (McKellar) and the best quote from life insurer is to guarantee CPI indexed $15,000.00 buying power for my son's life time, which is the most safe way to guarantee stream of income, the amount of income is really not attractive but it's tax free.

    3) Trust, setup a Trust and invest / manage the 0.8M by ourself, which would definitely generate higher gross income, but considering the Trust tax (40%), incoming tax, fund management fee, etc, it's hard to balance pros and cons.

    I've been brain squeezing for weeks to find out a solution for my son, cause it's for his whole life. Would anybody like to share your experience with me? and I really like to hear your suggestions and recommendataions, thanks in advance.

  2. #2
    Senior Member LaoziSailor's Avatar
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    Hey Terry,

    I'm not a financial advisor. I am one of the Peer Support volunteers at the Canadian Paraplegic Association (CPA). My suggestion would be that you pay them a visit, ...you mentioned being in Ontario and if you are close to Toronto:

    William Adair
    Executive Director
    CPA Ontario
    Ontario Head Office
    520 Sutherland Drive
    Toronto,
    ON
    M4G 3V9 PHONE: (416) 422-5644 ext: 225
    FAX: (416) 422-5943
    EXTRA PHONE: 1-877-422-1112
    bill.adair@cpaont.org

    I think they will be able to give you some advice.

    Cheers!
    Han Tacoma

    ~ Artificial Intelligence is better than none! ~

  3. #3
    [QUOTE=terry988]Hi, there.

    The auto insurance company is offering 0.8M for on-fault settlement in my 7-yr old son's case, while the no-fault is still ongoing, and we have 3 choices to accept this settlement. (we are in Ontario, CA)

    You don't mention what specific injury your son has. Quadriplegia? $1million isn't very much money, considering cost of care and complications. Years ago I had the offer of a lump sum payment or not. I ran the numbers and it just was not good. I'm not aware of just what the average cost of maintenance for SCI can be.......but I'd pass on the lump sum. The insurance companies like it, as it absolves them of further responsibility. But that may not serve you well.

    I think guaranteeing that his medical bills will always be paid, come what may, should be first consideration. Then hope you never need it.

    -Chuck-

  4. #4
    Senior Member ChesBay's Avatar
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    This post by "Smokey" on another insurance settlement post seems relevant and projects out life time costs. Also, it is written by a CA attorney.

    From working for a disability agency I have seen some settlements for young people that unfortunately made them ineligble for programs because of income. It seems if you could find a lawyer well versed in the disability issues and associated cost it would be the best way to plan.
    good luck with things,
    Ches

    Here is link and what smokey wrote:

    "Here is a link on expected lifetime costs of a SCI enumerated by a CA lawyer. I cannot tell you when it was written or if it is accurate but it seems comprehensive. I'll include the whole story below the link in case the site shuts down or drops the story. Hope this helps."

    http://consumerlawpage.com/article/s...ry_costs.shtml
    Last edited by ChesBay; 12-05-2005 at 03:12 AM.

  5. #5
    Senior Member smokey's Avatar
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    1. Terry, are you in Ontario, California or Ontario, Canada???
    2. How old was your son when he was injured?
    3. What were the circumstances that brought about his injury?
    4. What type of injury does he have and has he reached an "end result"...meaning has his condition/injury stabilized or will he become worse?
    5. What are the limits of the defendant's insurance policy?
    6. How many defendant's are involved?
    7. Do they have any other substantial assets to go after?
    8.. What is the fee your lawyer is taking and have you figured that into your calculations (contingency fee or hourly fee)?
    9. Who has paid for his medical care up until this point and will they demand subrogation (recovery of their money) if you settle your claim?
    10. Is this the insurance companies first offer? NEVER accept the first offer.
    11. Have you considered some sort of cost of living indexed to the settlement amount?
    12. Regarding the lump sum payment...will the court only put the entire amount in an conservative interest bearing instrument such as a money market fund or certificate of deposit? Will there be any fees/taxes involved?13. Who pays the bills from now until your son turns 18 years old?
    14. If you are in the US, do Medicare/SSDI figure into the calculations at all?
    15. If you are in Canada, do you have any program similar to Medicare that will figure into the picture at all?
    16. Be careful as some lawyers may want you to take the settlement choice that will provide THEM with the quickest and largest amount of money.
    17. Have you discussed the proposed settlement amount with other lawyers, actuaries, insurance companies or certified financial planners that can calculate the lump sum amount vs. the structured settlement amount vs. going to trial?
    18. How much are you suing for and what would the expenses be if you went to trial?

    Just some questions that popped into my head that you may not have considered yet.

  6. #6
    thanks, will give them a call.

    Quote Originally Posted by LaoziSailor
    Hey Terry,

    I'm not a financial advisor. I am one of the Peer Support volunteers at the Canadian Paraplegic Association (CPA). My suggestion would be that you pay them a visit, ...you mentioned being in Ontario and if you are close to Toronto:

    William Adair
    Executive Director
    CPA Ontario
    Ontario Head Office
    520 Sutherland Drive
    Toronto,
    ON
    M4G 3V9 PHONE: (416) 422-5644 ext: 225
    FAX: (416) 422-5943
    EXTRA PHONE: 1-877-422-1112
    bill.adair@cpaont.org

    I think they will be able to give you some advice.

    Cheers!

  7. #7

    Insurance Settlement.

    1. Terry, are you in Ontario, California or Ontario, Canada???
    Ontario Canada.

    2. How old was your son when he was injured?
    5

    3. What were the circumstances that brought about his injury?
    heads-on auto accident

    4. What type of injury does he have and has he reached an "end result"...meaning has his condition/injury stabilized or will he become worse?
    T8 - T10, ASIC-C, very stable with little sensaion back and with great body / balance control improvement

    5. What are the limits of the defendant's insurance policy?
    1M for at-fault.

    6. How many defendant's are involved?
    1 which is also my Insurance Company, because the real defendant was dead at the scene and she was not insured.

    7. Do they have any other substantial assets to go after?
    not quite sure what you are asking about.

    8.. What is the fee your lawyer is taking and have you figured that into your calculations (contingency fee or hourly fee)?
    10%

    9. Who has paid for his medical care up until this point and will they demand subrogation (recovery of their money) if you settle your claim?
    my employer extended health care and partial auto-insurance med benefits.

    10. Is this the insurance companies first offer? NEVER accept the first offer.
    yes, but they already offer up the limit, which is 1M, which 0.8M is for my son, so again the question is how we are going to take this offer, Lump sum, structure or Trust?

    11. Have you considered some sort of cost of living indexed to the settlement amount?
    not yet, I believe the individual's attitude would affect a lot on how he is going to live.

    12. Regarding the lump sum payment...will the court only put the entire amount in an conservative interest bearing instrument such as a money market fund or certificate of deposit? Will there be any fees/taxes involved?
    not very clear about where the court would put the money to, but I would say it would be very conservative interest bearing account, and there is no fee / tax involved.

    13. Who pays the bills from now until your son turns 18 years old?
    us, my employer's extended health care, and auto-insurance med and attendant care benefit.

    14. If you are in the US, do Medicare/SSDI figure into the calculations at all?
    no.

    15. If you are in Canada, do you have any program similar to Medicare that will figure into the picture at all?
    I would say it would be my employer's extended health care and public health care.

    16. Be careful as some lawyers may want you to take the settlement choice that will provide THEM with the quickest and largest amount of money.
    well, which lawyer doesn't.

    17. Have you discussed the proposed settlement amount with other lawyers, actuaries, insurance companies or certified financial planners that can calculate the lump sum amount vs. the structured settlement amount vs. going to trial?
    yes, they gave me some recommendataions and most of them incline to Structured Settlement, on their perspective. Do they really fully endeavor for my son's benefits? might be not, cause they have to consider their own commission, that's why I come to this forus to ask for help, and I do believe some of you would have experience on dealing such settlement.

    18. How much are you suing for and what would the expenses be if you went to trial?
    again, they offer to limit.
    Just some questions that popped into my head that you may not have considered yet.

  8. #8
    Senior Member LaoziSailor's Avatar
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    Hey smokey,
    Quote Originally Posted by smokey
    1. Terry, are you in Ontario, California or Ontario, Canada???
    ...snip...
    Just some questions that popped into my head that you may not have considered yet.
    ...duh, that first question was brilliant, when I was living in LA I used to go to Ontario and pretend I was back home , seriously though, I should have thought of that -- but then Terry has already settled it.

    The rest of your questions (for just popping into your head) are very educational. I'll keep them handy just in case (...and I really hope I never have a need for them) I get asked as a Peer Support rep.

    Cheers!
    Han Tacoma

    ~ Artificial Intelligence is better than none! ~

  9. #9
    Terry,

    Pop over to www.thomsonrogers.com . They are a Toronto personal injury firm and have a very good website with information on Accident Benefits.

    From what I understand - Catastrophic injuries (SCI and TBI) automatically qualify for $1 million lifetime attendant care benefits. On top of that should be ALL OTHER agreed future care costs (limits) and minimum income benefit.

    Did your lawyer commision a future care cost report for your son? If the answer is no - GET ANOTHER LAWYER NOW!

    The Ontario no-fault plan has basic minimum benefits assigned and at 800G's -You aren't getting them? Read the articles in their library for more info.

    Is your lawyer experienced in auto accidents resulting in SCI?

    I wish you and your family well.

  10. #10
    Senior Member
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    go with #2 structured settlement

    number 1 is too long to wait, inflation will prolly eat up any interest gained

    number 3 is a full time job and the best investors out there would have a hard time overcoming a 40% tax?

    i took a structured settlement, all income tax free, get lump sum payments every few years, and still have the option to go for #3

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