Quebec insurer SSQ is now offering policyholders a gradual inheritance option that will allow them to decide to when and how insurance proceeds will be paid to their beneficiaries. The annuity settlement feature is available on all new and existing insurance contracts.
Instead of paying out all of the insurance proceeds as a lump sum at death, policyholders may choose to have some or all of the money used to purchase either a term certain annuity or a life annuity for the beneficiary, with the option of a guaranteed minimum period. They may also choose to have payments made monthly, quarterly, semi-annually, or annually.
SSQ suggests this annuity settlement option is well-suited to beneficiaries who may not be prepared to manage a large influx of funds, and notes that a client's decision to add the option to a policy will remain private. Beneficiaries cannot modify the terms, and an annuity set-up in a beneficiary’s name cannot be redeemed or transferred.
While all payment options are available to a beneficiary who is currently a minor, if a beneficiary is still minor at the time of death and a life annuity has been selected, the death benefit will have to be paid to a trustee as a lump sum.
This new annuity settlement option also applies to all of SSQ's segregated fund and guaranteed interest account (GIA) contracts, including all guaranteed income contracts.