by John Darer® CLU ChFC CSSC RSP CLTC
More and more life insurance companies are introducing electronic delivery of structured settlement annuity contracts and other executed settlement documents. While this appeals to those individuals and companies that want to save trees and reduce administrative costs, one needs to be cognizant of the fact that there are some that need something more tangible, for good reason.
Cost Savings and Perceived Convenience v Branding
The insurers must weigh the modicum saved and the perceived convenience, against the branding opportunity and image that the policy folder represents.
Something Tangible and Thinking of Beneficiaries
For the injured party, who has only recently been introduced to structured settlements, it may represent something tangible for their loss. For their beneficiaries if they die, it is something that can be found in a drawer, box or file cabinet after a death. Electronic copies of structured settlement documents stored on a computer may be useless and inaccessible, if someone cannot get into a computer, or cloud account, or if accounts are frozen at the notice of death.
Couldn't they just call the structured settlement broker? What if the structured settlement broker is retired, dead or has switched companies or your don't know their name? What if their firm has been disbanded? It's hard enough when companies leave the market or merge.
Secured Creditor Pledge
Sending a hard copy of a structured settlement annuity policy by FEDEX, UPS, USPS express mail or certified mail, with delivery signature required is more assured than an email delivery that offers the recipient the opportunity to not acknowledge receipt.
"Value for Money" Image
When you're allocating $1,000,000 or more of your settlement on an annuity contact it is not unreasonable to expect something more than an email with a pdf attached. Several years ago I criticized an annuity issuer that sent its policies in plastic wrap on the same point. When people shop at Harrods they they want the bag for swag.
At the very least, life insurers that issue structured settlement annuities, are encouragedto offer a choice, and not simply default to the electronic delivery.