by John Darer CLU ChFC MSSC CeFT RSP CLTC
Structured settlements provide reliable stable income payments, Structured settlement payments can be mailed to you or they can be made by direct deposit.
When you receive structured settlement payments by check the insurance company will mail the payments in advance of the due date so payment arrive on time. When payments are made by direct deposit the payments are made on the due date, unless the due date is a holiday or weekend (see below for details).
Reasons why a structured settlement payment may be late
1. Does your payment due date fall on a weekend or holiday?
In the United States, account to account transaction are made using ACH (Automated Clearing House), which moves more than $41 trillion and 24 billion electronic financial transactions annually. ACH only operates on normal banking days, which don’t include weekends, national holidays or bank holidays. If your payment date falls on a weekend or holiday, don't worry, your payment will likely be made on the next business day.
2. Have you moved?
If you have moved, please note that your settlement agreement may provide that it is your responsibility to notify the structured settlement annuity issuer or assignment company of your new address. Put "notify insurance company" on your " To Do" list if you are planning to move. This is especially critical if you have infrequent payments.
3. Have you changed bank accounts?
Plan ahead and notify the structured annuity issuer one month in advance of the move. Don't close your old account until you have confirmation that the new direct deposit has been established.
4. Has the annuity issuer merged or been sold?
The company that is acquiring the annuity issuer may have different systems or procedures in place. A classic example is that Aviva Life Insurance Company used to mail payments 10 days in advance of a due date. In many cases this would result in payments coming in very early. People came to rely on the early payments even though it might have been a week before payments were contractually due, according to the settlement agreement. Sometime after Aviva USA was acquired by Athene Holdings in 2013, the payment time frames were tightened and annuitants thought their payments were late, due to their experience (of receiving them early), but they were actually on time.
If the annuity issuer has been sold then it is possible that a third party administrator is handling the run off. The above linked list of contact numbers should be very helpful.
5. Have you sold some of your structured settlement payments in the past?
If you have sold any part of any structured settlement payment to a buyer like Novation Funding in the past and your annuity issuer is one of those companies that does not split payments (e.g. American General Life Insurance Company, United States Life Insurance Company in the City of New York), then you are probably receiving the payments from a third party known as a payment servicer. Subject to a servicing agreement, the servicing company receives the entire annuity payment for that month and divides it up between you and the company that you sold to (or the individual or company that THEY assigned payments to). In all of that processing there is always the possibility for a delay.
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