What Does it Mean if Part of a Structured Settlement is Guaranteed?

Video Transcription:
When someone is designing a structured settlement, typically the insurance company will make some or all of the money in the structure guaranteed. Now what that really means is that they will pay that money to the person who is receiving it even upon their death.

Here's an example. You have a twenty year structure. The person is going to receive benefits every month for twenty years but during the first ten years the payment is guaranteed. And, this simply means that if the person were to die in year two the value of the remaining eight years of that structure would be paid to their estate, so that their loved ones or whoever is going to benefit from the estate would receive the money. So it's not dependent upon the beneficiary being alive.

It's pretty common to have a structure where there will be ten years guaranteed and ten years would be based on the person being alive. And, they are simply saying that they will guarantee payment of that sum whether the person lives or dies and that's what a guaranteed portion of the settlement is about.

Jim Dodson
A Florida injury lawyer, family man and avid cyclist who clients have trusted for over 25 years.