Qualified Structured Settlements

Scheduled payments designed for eligible physical injury and related claims

QUALIFIED SETTLEMENTSStructured Settlements for Eligible Physical Injury and Related Claims

When applicable legal and tax requirements are met, payments for qualifying damages may be excluded from federal income tax. Tax treatment depends on the facts and documentation of each case.

A qualified structured settlement can provide a custom-designed series of payments intended to address everyday needs, medical expenses, education, housing, retirement, 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. A structured settlement does not eliminate every financial risk, and recipients should consider liquidity needs, inflation, public benefits, taxes, and professional advice before selecting a payment plan.

Independent-life-service_4, Independent Life iStructure Select

Potential Benefits for Settlement Recipients

Tax-free payments that in aggregate exceed the lump sum alternative

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

Ability to preserve government benefits such as SSI, Medicare and Medicaid.

No investment fees or ongoing management costs.

Ability to designate a beneficiary to receive remaining guaranteed payments

Option to have an annual cost of living adjustment.

ONGOING SUPPORTPayee Protection Policy

Independent Life’s Payee Protection Policy provides an additional layer of support when a payee considers transferring future payment rights. Depending on the circumstances, Independent Life may provide information, participate in the review process, and reconnect the settlement professional who helped establish the original payment plan.

Learn About Payee Protection

Independent Life is unique because we’re both specialized and forward-thinking. We’ve proven you don’t have to choose between security and innovation. I’m proud to be part of a company that is raising the bar for our entire industry. We’re not just delivering structured settlements; we’re shaping the future of them and the entire industry that we serve.

Mikel Taft
Chief Business Development Officer

Qualified Structured Settlement FAQs

Important considerations for claimants, attorneys, and settlement professionals

What is a qualified structured settlement?

A qualified structured settlement generally involves periodic payments for eligible damages arising from personal physical injury or physical sickness. Specific statutory and documentation requirements apply.

Are qualified structured settlement payments tax-free?

Payments for qualifying damages may be excluded from federal income tax when applicable requirements are met. Not every settlement or payment is tax-free, and recipients should obtain independent tax advice.

How is the payment schedule selected?

The parties can design scheduled payments around documented needs such as medical care, education, housing, or future income. The agreed schedule is established before the settlement is finalized.

Can the payment schedule be changed later?

Structured settlement payment schedules are generally fixed once established. A proposed transfer of future payment rights is a separate legal process and may require court approval.

What if the claim does not qualify?

A non-qualified structured settlement may be available for certain other claim types. Eligibility and tax treatment vary.

Current payees can visit our policy holder resources, or contact Independent Life for assistance.

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Independent Life Insurance Company

P.O. Box 679053
Dallas, Texas 75267-9053
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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.