Super Fitness Health BlogStructured Settlements what Happens If You Die?
Its something that many people don’t want to talk about but what happens to your structured settlement payments if death occurs is something that is very important. Thinking about the possible cases that could occur with your structured settlement or annuity payments is both smart and wise.
If you consider that there are several possible things that could happen to your funds you will be better prepared in the case that your untimely death occurs. The outcome of what will happen to your payments after your death will depend on the legal guidelines of your structured settlement.
After Death Your Settlement Payments Just Stop
That’s right there are cases where the structured settlement annuity payments you are receiving will simply stop after your death. Of course some will say that this is the best situation for the insurance company that is actually paying the insurance installments.
Many times this is something that people who feel that they are young and in shape feel is a good option. They think hey I will be alive for a long time so most of the payments I will be able to collect on. In many cases though if the person is older or has been severely injured it is advised that this scenario not be recommended or accepted.
Structured Settlement and Annuity Payments Continue as Usual
Yes you guessed it there are some cases where even after death your payments will continue on as normal. These types are payments happen when you have a joint or survivor clauses in the contract. When these terms are included in the annuity contracts you will get payments for the lifetime of the contract and not your life per se. With these stipulations in the structured settlement contract is guarantees that either your spouse or child will be the beneficiary of the payments should you die before all payments have been received.
Getting A Reduced Lump Sum of Cash Instead
Sometimes instead of the payment continuing after the death of the person who has won the structured settlement a lump sum of cash will be paid out. What happens is the remaining payments are lump together and then a discounted or reduce rate is given to the beneficiaries.
The good thing about the lump sum cash option is that in many cases your beneficiaries will get a lot more funds than if they were to try and sell the monthly settlement payments to a structured settlement buyer. When you go to a structured settlement company you will usually only get about 50-70% of the total settlement due. When you have a commutation rider clause they will receive 90-95% of the payout.
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