Structured settlement annuities ("structured settlements") are an insurance product that generates one or more customizable streams of income and/or periodic lump sum payments, in a single annuity contract.

Structured settlement annuities are an an approved form of "qualified funding asset" as set forth in IRC 130(d) of the Internal Revenue Code of 1986, as amended.

Structured settlement annuities help bridge gaps and are used to fund damages in the settlement of claims, lawsuits or other disputes where income certainty is needed. 

If you are a personal injury lawyer, employment lawyer,  aviation lawyer,  medical malpractice lawyer,  construction lawyer, defense or plaintiff, who hasn't sought a quote for structured settlement annuities in a while, you may want to give them a look now.

Structured settlement annuities are one valuable piece of the settlement planning puzzle. Trial lawyers who earn contingency fees for services may  use any of the types of structured  settlement annuities as one of their options to fund certain structured attorney fee deferrals.

How do structured settlement annuities differ from regular retirement annuities?

Structured settlement annuities differ from from retirement annuities in their ability to provide one or more customized stable annuity payment streams in a single contract. This is a significant difference and advantage over retirement annuities, which lack the customization and would require multiple contracts.  

By using structured settlement annuities, you can combine elements of immediate annuities, deferred income annuities, deferred kump sums, index adjusted annuity income, and deferred annuities, to address different needs and timing. 

Prudential introduced Income Advantage, a next generation index linked structured settlement annuity in October 2023, that offers plaintiffs (and plaintiff lawyers structuring fees) with increased flexibility, offered by an insurer in business since 1875. Interesting option for a long deferral part of a minor's settlement, or for a retirement option for a lawyer. Read more about Prudential's Income Advantage here

Pacific Life Insurance Company (Pacific Life and Annuity Company, in New York) has an option for an index linked annuity payment adjustment rider (ILAPA) to add to the settlement planning mix.  Payments can adjust upwards with positive changes in the S&P 500, with a 5% cap and with no downward adjustments. A NextGen version is expected in late 2025.

Independent Life Insurance Company issues the structured settlement market's first uncapped index linked structured settlement annuity, participating in changes to the Franklin BofA Word Index. Read about the iStructure index linked structured settlement annuity here

Interest rate linked structured settlements were a Pandemic Era  response to  a perceived resistance by prospects to lock in historically low interest rates for an extended period. By using an objective formula triggered by point to point changes in the 10 Year US Treasury, interest rate linked structured settlements provided the potential to benefit from rising interest rates in the following years through a conversion of lump sums to income streams at prevailing rates, if the feature is set up when the contract is established.

Additional indexed structured settlement annuity options and innovation is coming in late 2025.  Stay tuned.

Structured settlement annuities are a core personal injury settlement planning tool

The safety, stability and guarantees inherent in structured settlement annuities are ideally suited to be the foundation of a well-crafted settlement plan.  Income certainty is a basic need. Design your own basic income or more.

Who offers structured settlement annuities?

Legitimate structured settlement annuities are only available through insurance licensed and appointed specialist structured settlement brokers and settlement planners. 

The life  insurance companies that issue structured settlement annuities are among the largest and well capitalized in the world  

Each insurer is subject to strict financial reporting requirements. Insurer financials are audited on a regular basis by the state insurance regulators in each state that they do business .

Flexibility in choice of payment types, amounts, timing of payments and customization to suit your or your client's needs

You can blend together different types of structured settlement payment streams   to address unique

known or predictable needs,in a single annuity contract. This is a big difference between structured settlement annuities and retirement annuities. This enables payees to conveniently address multiple needs at once, with a high level of precision. Structured settlement payments can begin immediately or can be deferred, or both

Structured settlement  cash flows can also be diversified by split funding between more than one life insurance company and/or between fixed, index-linked structured settlement annuities and market based structured settlement solutions.

Structured settlement annuities are not just for personal injury settlements

While structured settlement annuities are most commonly used in the settlement of claims or lawsuits involving personal injury, wrongful death or worker's compensation, structured settlement annuities can also be used in the settlement of employment lawsuits .