by John Darer® CLU ChFC MSSC RSP CLTC
If you have a structured settlement funded with an annuity from Allstate Life Insurance Company or Allstate Life Insurance Company of New York and you have lifetime payments with a certain period and/or accompanied by guaranteed lump sum payments, it is possible that you were actually issued two annuity contracts.
Say your structured settlement was due to make the following payments
- Beginning 04/01/1999, $5,000 per month for life with 20 years certain and increasing at 3 % compounded annually
- $100,000 guaranteed lump sum on 4/15/2016
- $100.000 guaranteed lump sum on 4/15/2018
The two contracts will likely have the same number but be followed by the letter A or B., with one promising to pay the certain/guaranteed payments and the other promising to pay the lifetime payments. The lifetime piece, in this example would begin 04/01/2019 would start at the an inflated monthly amount (3% compounded for 20 years)
The unique way that Allstate Life issued their contracts meant the possibility that one annuity contract would end as another one began. This required a reliable data entry person to assure a seamless transition. In a recent case we discovered, 20 years after the fact (the annuities were written by another structured settlement broker), a situation where there was data entry error. Fortunately the error was corrected, but not without a little "agita".
Since it discontinued issuing new structured settlements in 2013, Allstate has outsourced certain customer service functions to a call center in the Philippines and upon my personal observation and that of another respected member of the profession, these people are woefully uninformed and may not know the history.
Allstate has been in business since 1931. There is no reason to believe that Allstate Life Insurance Company will not honor their contracts. This is simply an administrative issue.
If you are a payee under an Allstate Life structured settlement contract, however, or the guardian or conservator for a payee, please contact Allstate Life to verify your benefits as the end of the guarantee period approaches. Be sure to have the contract numbers handy.
If you are divorced spouse of payee under an Allstate Life structured settlement annuity that has been split and you are entitled to lifetime payments under a joint and survivor annuity, you should contact Allstate to verify at the end of the certain period as well.
While you're at it, make sure beneficiary designations are up to date, if there has been a change in your life (marriage, birth, death, change of gender, change of heart)