I'm pleased to share with you today news of a brand new structured settlement option being introduced by Pacific Life, one of the leaders in the structured settlement annuity marketplace.

Almost as much fun to say as The International Silver String Submarine Band, Pacific Life's Structured Settlement Indexed Linked Annuity Payment Adjustment Rider is now available for any claim currently eligible for structured settlements.

But before delving into this new structured settlement option itself, a little background on Indexed Annuities in general seems in order.

Fixed Indexed Annuities

For several years now, our firm has been tracking the growing popularity of something called Indexed Annuities - a hybrid life insurance annuity product that combines the security features of traditional fixed annuities with an element of market upside potential.

Indexed Annuities have been particularly popular with the baby boomer set because many who still have retirement savings intact don't want to risk another market crash; however, they fear current fixed interest rates are "too low" for a long term commitment.

For them, Indexed Annuities represent the perfect compromise and we have been pleased to be in a position to present clients with this retirement annuity alternative in addition to the traditional fixed retirement annuities we offer.

Many clients choose Indexed Annuities because of a lifetime income rider which allows them, at some point in the future, to convert their accumulated funds to guaranteed cash flow that can never be outlived.

So how popular are these things?

Consumers plunked down a not-insignificant $39.3 billion last year to secure their futures with this innovative product that provides them with a minimum amount of guaranteed interest but, because it is also linked to a market index (hence the name), allows them to share in some, but not all, of the market upside should the index rise.

Indexed Annuities aren't for everybody and the inner workings of their design make them a little more challenging to understand. But for the right person in the right situation, they can be a perfect complement to successful retirement planning.

Structured Settlements

Since Pacific Life already offered regular Fixed Indexed Annuities to the broader annuity brokerage community for retirement planning purposes, adding an indexed feature to its complement of structured settlement offerings seemed only natural.

In development for more than two years, Pacific Life welcomed news this past Monday that the Internal Revenue Service issued a favorable private letter ruling (PLR) maintaining that the income tax-free nature currently accorded non-indexed structured settlements under IRC § 104(a)(2) would be preserved for the taxpayer when using their new product offering.  

As soon as the PLR is published, we will feature it on The Finn Blog so please check back in the near future.  (NOTE: PLRs may not be cited as precedent)

Meanwhile, to learn more about the details of this exciting new option for personal, physical injury claims with structured settlement potential, just . . .