An often-underutilized structured settlement product is a non-qualified annuity. The annuity options are many and can be used in settlements involving employment litigation, contract disputes, environmental claims, punitive damages and other legal matters.
Freedom Income Annuity. The Freedom Income annuity from Symetra Financial allows the annuity holder to defer non-qualified monies to future dates, such as the age of majority or at retirement. The fixed amount cannot lose value over time. Additionally, earnings over the span of the annuity are only taxed when received. This product is also used in constructive receipt cases, estate planning and as a gift to a minor.
If a client would rather have payments start within a year of purchase, a single premium immediate annuity is another option. Payments are spread out over time giving the client the peace of mind of receiving a guaranteed income stream for a fixed period or for a lifetime.
Structured Installment Sale. A Structured Installment Sale through Met Life is ideal for selling real estate or a business. The annuity guarantees an income stream over time and can help clients defer and potentially reduce taxes so they keep more of their proceeds. It works by transferring the periodic payment obligation to an assignment company where the seller receives at least one payment after the tax year in which the sale occurs.
If you have questions about non-qualified annuities and how they may fit your client’s needs, give Patrick a call 800-734-3910 or email him.
About Patrick McNulty, CSSC, has joined Pat Farber’s staff, coming from Berkshire Hathaway where he focused on structured settlements products for over 10 years. One of his specialties is non-qualified settlement annuities. Patrick can be reached at email@example.com