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Alternative Insurance Solutions

Competitive Financial Plans with Flexible Options

Once a claimant or an attorney takes constructive receipt of the settlement proceeds, a traditional structured settlement annuity is no longer an option. Fortunately, there are several attractive alternative insurance solutions, each with a unique purpose.

Annuity Options

Tax-Deferral on Growth
All post-settlement annuity purchases are made with after-tax or tax-free (physical injury settlement) dollars and fall within the retirement annuity space. All annuities in this space provide tax deferral on any growth in the product. A portion of each payment is counted as taxable income based on an exclusion ratio.

59½ Rule on Distributions*
With tax deferral comes the expectation that the future use of the annuity is retirement funding. The IRS defines retirement as age 59 ½ or older. If funds are accessed prior to age 59 ½, an additional 10% tax penalty may apply to the taxable portion of this distribution.

* IRC 72(q) provides additional information about application or exception from the 10% tax penalty, however you should consult your own tax advisor as individual circumstances my vary. Structures, LLC cannot provide tax advice.

Annuity Products Available

  • Fixed Annuities (FAs): FAs provide periodic payments, typically on a monthly basis over a fixed period or the lifetime of the annuitant. Payments can be tailored to meet future financial needs and can be guaranteed for a specific time frame.
  • Fixed-Indexed Annuities (FIAs): FIAs track a market index to measure potential increases in value or payment amount. The FIA protects the downside risk of the index, guaranteeing principal and credited gains.
  • Other Annuity Alternatives: Multi-year guaranteed annuities (MYGAs) are credited with a set interest rate and maturing date. Qualified longevity annuity contracts (QLACs) defer certain required distributions from qualified retirement plans.

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