by John Darer CLU ChFC CSSC RSP
Be careful how you use the word "guarantee" when expressing structured settlement payments in settlement agreements, qualified assignment agreements or sales presentations.
While a number of people and at least one life insurance company's quoting software continue use the term "guaranteed" in connection with period certain elements of a structured settlement quote, one must consider that lifetime payments ARE "guaranteed", contractually guaranteed by the life insurer issuing the annuity, to be paid for the duration of the annuitant's life.
Period certain payments and guaranteed lump sum payments are payments that will be paid whether or not the annuitant survives the payment schedule.
A number of settlement firms, including ours, wisely recommend defining the term "guaranteed", if it is used in settlement documents.
To avoid confusion and/or misinterpretation a possible better way to differentiate such payments would be to express them as "life contingent" and/or "non life contingent" payments.
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