For decades, structured settlements have been providing people with a reliable income stream. As the market evolves, though, we want to make sure your structured settlement options keep up. Today, we can offer a new rider you can add to your structured settlement to potentially increase your payments.
Meet the ILAPA Rider and Learn What It Can Do for You
This rider is called an Index-Linked Annuity Payment Adjustment, or ILAPA. This rider comes from Pacific Life, an annuity company we work with. The ILAPA rider allows you to tie your settlement to the S&P 500 — but without any risk. If the S&P index goes up, your structured settlement payments go up. But if the S&P stays the same or takes a dip, your payments stay the same.
The ILAPA rider isn’t your only rider option. In fact, the idea of adding a rider to structured settlements isn’t new. For years, many individuals have chosen to add a cost-of-living adjustment (COLA) rider. With this rider, they can get gradual payment increases over time to keep up with the cost of living.
COLA rider increases make a difference, helping people live more comfortably, but they’re usually limited to around 2%. With an ILAPA rider, you can see increases of as much as 5%.
How the ILAPA Rider Works
If you choose an ILAPA rider, we enter into a year-long index measurement period. During that period, we monitor the S&P 500. At the end of the year, we review the S&P’s performance and adjust your annuity payment accordingly — assuming the S&P performed well.
If S&P returns went up, we increase your payment by that percentage (up to 5%).
But don’t worry. If the S&P stays flat, your payments stay the same. And if it decreases, they aren’t affected either.
In other words, an ILAPA rider gives you a win-win situation. During years when the S&P performs well, you’ll see a percentage increase in your payments. If it doesn’t, your payments are unaffected.
What’s more, any yearly increases you get stay with you. Even if the S&P doesn’t perform well in the next year, you still get to reap the benefits of the percentage increase you received the year prior.
This works by separating your structured settlement into two streams. The main stream of the settlement is guaranteed so you never have to worry about a decrease in payments. With the ILAPA rider, you also get a special payment stream that may or may not increase depending on the S&P index.
The ILAPA rider is a new, innovative way to get more from your structured settlement. If you’re interested in learning more about how this add-on could help you use the money in your settlement to increase payments for yourself over time, don’t hesitate to get in touch with our team at Quest Settlements. As experts in structured settlements, we can help you understand all of your options and choose the right settlement — and potentially the right rider — to maximize your recurring payments.