Frequently Asked Questions Regarding Annuity Flexibility

Will a life threatening injury to the claimant have an impact on the annuity plan?

Annuity policies can be used in many ways. Can you illustrate some of the uses?

Can a payee of a structured settlement annuity contract demand that the contract be terminated and the commuted value of the contract be paid to him or her as a lump sum?

Is it better to name a specific person as the beneficiary of the guaranteed benefits of the annuity or the estate of the annuitant?

It is usually better for the estate of the annuitant to be named as beneficiary of the guaranteed benefits. Such a designation allows the annuitant, through their last will, to specify one or more beneficiaries or even a testamentary trust. This allows for very customized estate planning as well as allowing the annuitant to adjust the beneficiary or beneficiaries over their lifetime. Naming a specific person as the beneficiary, without requesting permission for future change, creates a more difficult scenario if the annuitant wishes to change the beneficiary in the future. The owner of the annuity must be consulted and due consideration given to the fact that the settlement agreement would not be consistent with the requested change.