by John Darer® CLU ChFC CSSC RSP CLTC
Pacific Life introduced its Index linked annuity payment adjustment rider in 2014 and it is has performed for Pacific Life structured settlement payees, with a 5% upward adjustment in payments applied a the end of the first contract year. It turned out to be a great deal because the benefit is priced out at a similar rate to a 2.3% COLA.
Benefits increase based on a "point to point change" in the S&P 500 with a cap of 5%, as was the case at the end of the first year. The ILAPA rider allows for a potential payment increase of up to 5.00% based on positive performance of the S&P 500 during the annual index measurement period while preserving the benefits if the S&P 500 has a negative performance year, as we've seen for much of 2015.. So if the S&P comes up with a net negative for the measuring period, the benefits stay the same.
The index linked structured settlement rider is a diversification option that provides the potential for structured annuity payment growth without the downside risk.
In this following video, which was released in March 2014, I take you through an introduction to the Pacific Life structured settlement Index-Linked Annuity Payment Adjustment Rider which may be of interest to plaintiffs, defense, plaintiffs' and defense personal injury trial lawyers in New York, Connecticut and elsewhere as well as claims adjusters handling medical malpractice, personal injury and wrongful death cases with a need to make payments over an extended period of time.