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Non-Qualified Structured Settlements

Certain types of settlements do not qualify for income tax exclusion via a traditional structured settlement annuity. Fortunately, a non-qualified structured settlement annuity offers guaranteed1 tax-deferred payments for a wide range of cases.

Non-Qualified Assignment

Non-qualified structured settlements are those that do not qualify for income tax exclusion under Section 104 of the Internal Revenue Code. A non-qualified assignment offers a claimant involved in a non-physical injury case the opportunity to place all or a portion of the settlement proceeds in a structured settlement.

The claimant receives the settlement funds in a series of periodic payments and is liable only for the taxes on the funds received within a given tax year. In the meantime, the pre-tax settlement funds continue to earn interest.

Why utilize a non-qualified structured settlement annuity?

  • Defer paying taxes on the lump sum settlement proceeds
  • Create a stable, long-term source of income
  • Receive guaranteed payments1

Types of Claims

Non-qualified structured settlements can be used to resolve many different types of claims, including, but not limited to:

  • Employment litigation (e.g., wrongful termination, sexual harassment, discrimination, and mental anguish)
  • Construction defects
  • Contract disputes
  • Punitive damages
  • Environmental claims
  • D&O and E&O claims

Market-Based Structured Settlements

In addition to structured settlement annuities, there are other investment options available to claimants involved in non-physical injury settlements. To learn more, visit our Market-Based Structured Settlements page.

1Guarantees are subject to the claims-paying abilities of the issuing insurance company.