Prudential Income Advantage Upgraded!
John Darer • January 25, 2024
Prudential announced a change to the death during deferral period option for Income Advantage, its Indexed Structured Settlement Annuity
What’s changing?
According to a January 25, 2024 release by Prudential Insurance Company of America:
- Effective immediately, if a claimant (or attorney structuring their fee) dies during the deferral period, any interest will continue to be credited during the deferral period. Payments will then be made, as they become due, to the designated beneficiary(ies). This will be the new default option.
- Alternatively, the claimant may elect at the time of settlement (at no additional cost) to commute the accumulation amount (the total of the premium plus any index-linked growth).** If elected, and the claimant dies during the deferral period, the beneficiary(ies) will receive a designated percentage (as set forth in the Annuity Certificate) of the accumulation amount in a lump sum; provided that such amount will not be less than the minimum amount under applicable law. Previously, this was the only option available.
Good heads up play by Prudential!
What’s not changing?
The death during payout options and all other Prudential structured settlement annuity products.
** If commutation is elected, and the claimant then dies during the deferral period, and the death occurred relatively close in time to the date of sale, it is possible that the lump sum payable to the beneficiary(ies) could be an amount that is less than the premium amount paid for the annuity.
Prudential Insurance Company of America, founded in 1875, with its home office in Newark, New Jersey, is one of America's oldest insurance companies.
Still Work to Be Done Industry Wide
There is still work to be done, in my opinion to move to an adoption of second generation responsive commutation riders. I have authored several articles about the need for responsive structured settlement payment riders on my Structured Settlement Watchdog blog.
Structured Settlement Commutation Riders Must Be Revisited Before Estate Tax Cuts Expire in 2025 - Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and John Darer Reviews (typepad.com)
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An annuity and a structured settlement walked into a bar, how do you tell them apart? 4structures' John Darer reviews the differences for you right here.
A lifetime structured settlement annuity turns part of your settlement recovery into guaranteed income you can’t outlive that is contractually guaranteed by a regulated life insurance company. A lifetime annuity is sometimes referred to as longevity insurance.
Structured settlement annuities can be very helpful to the budgeting process by providing guaranteed income streams and deferred lump sum payments tailored to specific budget needs and time frames identified in the settlement planning process.
Structured settlement receivables are often deceptfully marketed to investors as annuities. When the originating structured settlement factoring company buys structured settlement payments in a structured settlement factoring transaction, they are buying a receivable not an annuity.
Avoid constructive receipt if a structured settllement or structured attorney fee is to be established. Care must be taken to avoid constructive receipt.
Financial services provider USAA ranks 94th on Fortune 500. USAA Life Insurance Company, which earns the top rating of A++ from AMBest is often super competitive on longer term payment streams.
John Darer reviews Prudential Income Advantage structured settlement annuity, which provides indexed structured settlement annuity option with the potential to grow personal injury settlement funds while offering protection from market declines. 2 IRS Private Letter Rulings!
