Indexed Structured Settlements: Tax-Free Income & Growth Combined

How Market-Linked Options Are Bringing New Growth Potential to Tax-Free Income

For years, structured settlements have been the gold standard for helping injured individuals create long-term financial security. The appeal is simple: guaranteed, tax-free payments that can provide income for years or even a lifetime. But recently, structured settlements have been getting an exciting upgrade. 

New products are now allowing claimants to combine the security of traditional structured settlements with the growth potential of the stock market, specifically through strategies linked to the S&P 500 Index.

Prudential Income Advantage

Prudential's Income Advantage gives claimants the opportunity to participate in S&P 500-linked growth while protecting against market losses. During a deferral period, funds have the potential to grow based on index performance, subject to a cap. If the market declines, previously credited gains are protected and the value does not decrease. 

The result is a guaranteed baseline benefit with the possibility of larger future tax-free payments if the market performs well. 

Pacific Life Payout Plus

Pacific Life recently introduced Payout Plus, an innovative option that allows structured settlement payments to potentially increase over time. Payments are linked to S&P 500 performance and can grow when the market performs well, while never falling below a guaranteed baseline payment. 

For claimants worried about inflation and rising costs, Payout Plus offers a way to maintain a protected income floor while still enjoying upside potential. 

Pacific Life ILAPA

Pacific Life has long been a leader in this space with its Index-Linked Annuity Payment Adjustment Rider (ILAPA). ILAPA allows structured settlement payments to increase based on positive S&P 500 performance, up to an annual cap, while never decreasing when the market is down. 

In simple terms: payments can go up, but they don't go down. That's a feature many claimants find extremely attractive. 

Why a Combination Strategy

The most effective approach may be combining traditional and indexed structured settlements.

A traditional structure can provide dependable monthly income for essentials like housing, food, medical care, and daily living expenses. Meanwhile, an indexed option can provide growth potential to help offset inflation and create larger future payments. 

Think of it as building a financial house: the traditional structure is the foundation, while the indexed structure gives you the opportunity to build a bigger second floor or put in a pool! Check out our example below.

EXAMPLE:

Blended Structured Settlement Example

Attorneys Can Structure Their Fees!

These strategies aren't limited to injured claimants. Attorneys can also structure their contingent fees and take advantage of long-term income planning opportunities. Indexed structured fee arrangements can offer future growth potential while preserving the benefits that have made structured attorney fees popular for decades. This is a great way to reduce taxable income and increase future retirement funds.

Final Thoughts

Structured settlements have always been about protecting financial futures. Today's indexed options add something new to the conversation: opportunity. Products like Prudential Income Advantage, Pacific Life Payout Plus and ILAPA give claimants and attorneys the chance to enjoy guaranteed income while participating in market-linked growth potential. 

In a world where people want both security and growth, that's a pretty exciting combination.

Contact our office today for your free quotes: 248-715-5250 or email Chris @ chathaway@atlassettlements.com or Mike @ mhathaway@atlassettlements.com