A structured settlement and an annuity walk into a bar, how can you tell them apart?

Here are some talking points about the differences between a structured settlement and an annuity:

1. A structured settlement is a form of negotiated settlement of claims and lawsuits in which some portion of damages is paid in the form of periodic payments. 

2. A structured settlement is not a financial product.  An annuity is a financial product.  This is an important distinction.

3. A structured settlement may be funded by an annuity (or annuities) however, a structured settlement is not an annuity.

4. Regular annuities don't usually have a "wingman".  A structured settlement annuity generally has a "wingman" known as a qualified assignment company, because such annuities are not available for retail purpose. In the majority of structured settlement transactions, the annuity is purchased by a qualified assignment company. If a structured settlement is set up to pay taxable damages, the "wingman" is known as non-qualified assignment company.

4. While annuities are the most common method of funding structured settlements, they are by no means exclusive form of funding. There are other options to fund a structured settlement in addition to annuities, such as Treasury Funded Structured Settlements , Market Based Structured Settlements , Periodic Payment Reinsurance and Funding Agreements

Read What is a Structured Settlement?  and Structured Settlement Annuities for more information. 

Last updated July 1, 2025