by John Darer CLU ChFC MSSC CeFT RSP CLTC
"What happens to my structured settlement when I die?" is a Frequently asked Structured Settlement Question 
- If you your structured settlement has a period certain or guarantee period (as many frequently do), any "certain" or "guaranteed" payments remaining to be paid are then paid, when due, to your beneficiaries, or your estate if you have not named a beneficiary. It's a good idea to name a beneficiary to avoid probate delays.
- Review your structured settlement documents carefully, because the terms certain and guaranteed can be misinterpreted. The term "certain" is often used to describe payment streams like "$5,000 per month for life, with 25 years (300 monthly payments) certain." Future lump sums that are payable regardless of whether you live or die are commonly referred to as "guaranteed lump sum payments."
- Review your beneficiary periodically to assure that your designation is up to date with respect to your current life situation and reflects your current wishes.
- Some structured settlement annuity contracts include a commutation rider, which provides a discounted lump-sum payment in place of future periodic payments upon the annuitant's death. To qualify for favorable tax treatment, the foundation for the commutation provision must be established in the settlement documents when the structured settlement is created. Commutation riders are commonly utilized when (i) the settlement is paid into a special needs trust, (ii) there is a need for estate liquidity, or (iii) the likelihood of beneficiaries requiring or benefiting from periodic payments is minimal. The cost of commutation is generally more advantageous than selling to a "cash now" company, as most companies offer 95% of the present value of the remaining payments, calculated on the date of death using a published bond index. Some companies use the crediting rate on the day the structure was created as the basis for a discount rate.
- If you have a joint and survivor payment, the structured settlement payment will be paid to your survivor for the remaining years of their life. A Joint with 100% to the Survivor is most common.
Discuss your settlement planning needs with a professionally licensed, credentialed and experienced structured settlement broker or settlement planner.
Last updated August 22, 2025
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