Non-Qualified Structured Settlements

Non-qualified structured settlements provide flexible scheduled payments for eligible claims outside the physical injury tax exclusion

NON-QUALIFIED SETTLEMENTSScheduled Payments for Eligible Claims Outside the Physical Injury Tax Exclusion

A non-qualified structured settlement can provide a custom-designed series of payments intended to address everyday needs, education, housing, retirement, business planning, or other anticipated obligations. Payment dates and amounts are established in the settlement documents.

Scheduled payments may help recipients manage settlement proceeds over time and reduce reliance on a single lump sum. Tax treatment can vary by claim type and payment component, so recipients should review liquidity needs and consult independent tax and legal advisors.

Potential Benefits for Settlement Recipients

Guaranteed, tax deferred payments over a defined period of years or for life.

Reduced tax liability due to potentially lower tax bracket at time of payments.

No investment fees or ongoing management costs.

Ability to designate a beneficiary to receive remaining guaranteed payments.

Protection of future annuity payments from claims of creditors in most states.

When to consider a Non-Qualified Structured Settlement

Non-qualified structured settlements are available for a wide range of settlement types, including:

Wrongful termination

Sexual harassment

Discrimination

Psychological or emotional harassment

Construction defect

Punitive damages

Whistleblower claims

Environmental claims

Errors and omission claims

Directors and omission claims

Patents or intellectual property

Divorce

Installment sales of real estate or business

Wrongful incarceration

Attorney fees associated with these types of cases

Independent Life works with attorneys and settlement professionals on non-qualified settlement designs for eligible cases that fall outside the physical injury tax exclusion. Depending on the claim, documentation, and applicable law, periodic payments may affect when taxable amounts are recognized. No particular tax outcome is guaranteed.

Independent-life-image_illustrations_3, Independent Life iStructure Select

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Troy Christensen
SVP, Head of Risk and Compliance

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Any discussion of taxes herein is for general informational purposes only and does not purport to be complete or cover every situation. Independent Life, its affiliates, its distributors, and its and their respective representatives do not provide tax, accounting, or legal advice. You should confer with your qualified legal, tax and accounting advisors based on your particular circumstances. All guarantees are obligations of Independent Life Insurance Company.