Why the Market Needed a New Non-Qualified Structured Settlement Plan
Structured settlements are typically associated with physical injury, sickness, wrongful death or workers’ compensation claims. In these cases, the tax code allows the claimant to receive income tax free compensation for their injuries, spread over time, from a trusted life insurance company via a §130(c) qualified assignment but what, if any, options are available for non-injury cases?
Enter non-qualified assignments. Non-qualified assignments allow periodic payment settlements from a non-physical injury to be transferred to a responsible assignee. This allows the payer to write a single, up-front check and be released from future obligation while giving the payee the payments in a more tax-efficient manner as the money is distributed over time.
Since early 2018 options for non-injury cases have been limited to regular payments starting within a year, so most claimants accepted their funds as a lump sum and paid taxes at that year’s marginal rate. The market was missing the ability to defer past one year, the ability to have irregular payments and lump sums, or even to lock in a price while finalizing the paperwork. In response, Independent Life launched our non-qualified assignment product on April 15, 2019 to fill the gap left in the marketplace.
In contrast to an on-shore solution confined to a regular payout annuity form, Independent Life’s non-qualified assignment product utilizes an offshore assignment company to offer fully customizable payout patterns of fixed and guaranteed payments to settlement planners and their claimants including deferred, lump sum, fixed period or lifetime payments.
Having a non-qualified option gives settlement planners another tool for arranging an effective settlement for a variety of non-injury cases like:
Since the launch, the market has responded with resounding approval and we are receiving an increasing number of quote requests each day.
Do you have case that would benefit from a non-qualified assignment? Request a quote today by calling 1.800.793.0848 or emailing quotes@independent.life.
