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What are the features of a structured settlement annuity?

 

  • An income-tax-free series of payments†
  • A guaranteed steady stream of payments for your lifetime or a set timeframe
  • If you have the flexibility to design a payment schedule as part of your personal physical injury settlement, including payments guaranteed to last your entire life, consider the following facts:
    • A Pacific Life structured settlement provides payments that last as long as you need to replace lost earnings, pay for ongoing medical expenses, or provide for a loved one.
    • You may defer payments for specified time frames to pay for future needs such as college education.
    • A structured settlement annuity allows you to set aside lump-sum payments for large purchases such as remodeling your home or buying a car.

 

 

 

 

 

 

 

 

 

Insurance products are backed by the financial strength and claims-paying ability of the issuing company.
Excludable from gross income under Internal Revenue Code (IRC) Section 104(a)(1) or (2).


Product Information
 

  Payment Choices Commutation Riders  
 
  • Single or Joint Life – Guaranteed payments that will last a lifetime
  • Period Certain – Guaranteed payments to the injured party (or beneficiary) for a specified amount and period of time
  • Lump Sums – Guaranteed payments for specific amounts on specific dates
  • Installment Refund
  • Cash Refund
  • Deferred Benefits
  • COLAs, Step or Flat Dollar
  • Indexed-Linked Annuity Payment Adjustment Rider
Estate Tax Rider
  • Available on all cases containing guaranteed benefits.
  • Assignment acceptable.
  • Available in all states except Texas.

Elimination of Liability Rider
  • Available only on unassigned cases.
  • Used when a defendant's liability no longer exists due to a state statute or situational changes (Example: Dependant not attending college).
  • Not available in Pennsylvania.

Remarriage Rider
  • Available only on unassigned cases.
  • Used when a defendant's liability no longer exists due to remarriage of a surviving spouse.
  • Not available in Pennsylvania.
 
       

 

Tax Considerations

Qualified Annuities
  • Workers’ Compensation Claims: IRC Section 104(a)(1); Assigned or Unassigned
  • Personal Injury Claims: IRC Section 104(a)(2); Assigned or Unassigned
Nonqualified Annuities
  • Contact Home Office for guidelines

This material is not intended to be used, nor can it be used by any taxpayer, for the purpose of avoiding U.S. federal, state, or local tax penalties. This material is written to support the promotion or marketing of the transaction(s) or matter(s) addressed by this material. Pacific Life, its distributors, and respective representatives do not provide tax, accounting, or legal advice. Any taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor or attorney.

Guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company.

Insurance products are issued by Pacific Life Insurance Company (Newport Beach, CA) in all states except New York and in New York by Pacific Life & Annuity Company. Pacific Life refers to Pacific Life Insurance Company and its affiliates, including Pacific Life & Annuity Company.