Thu. Jun 1st, 2023

structured settlement annuity brokers

Structured Settlement Annuity Brokers

Structured settlements provide claimants involved in certain types of cases with a valuable tool for financial stability. However, there are a number of myths that prevent claimants from considering this approach or even allowing their attorneys to recommend structured settlements in the first place.

The best option is to consult with a qualified settlement planner or structured settlement annuity broker before signing any settlement agreement. These professionals will be able to save you time and reduce liability in your settlement.


A structured settlement broker is a professional who specializes in helping personal injury and wrongful death victims receive tax-free, income-producing periodic payments instead of immediate and fully taxable lump sums. Structured settlements allow injured victims to receive a larger lump sum amount than would otherwise be possible, while also providing dissipation protection and the security of lifetime income.

In the United States, brokers are typically licensed professionals in fields where specialized knowledge is required, such as insurance, finance and real estate. They are paid a percentage of the transaction value or commission according to custom and by law.

Generally, brokers who place structured settlement annuities are regulated by the laws of the state where they are licensed. Those who do not meet the qualifications may face fines, suspension or revocation of their licenses.

The Department of Justice establishes a list of annuity brokers that meet minimum qualifications to provide these services. This list is updated periodically and is made available to attorneys who request it.

To qualify for inclusion on the list, an annuity broker must have substantial experience in the past three years and abide by specific procedures.

A structured settlement annuity is a contract that allows injured people to receive a series of future payments based on a specified formula. These payments can be arranged to start immediately or postponed until a later date.

These payments can be used for a variety of purposes, including medical expenses, income replacement, and dissipation protection. They can also be set aside for attorney fees or to fund a specified trust.

The defendant and the plaintiff work together with a qualified assignee to determine the amount of regular payments, how long they should continue for, and whether to increase them or to supplement them by larger payouts at certain times. The qualified assignee then purchases an annuity from a life insurance company, setting up the annuity contract to match the settlement needs.

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A qualified assignment is a legal process that relieves a defendant from further responsibility for making payments and transfers the administration and record-keeping responsibilities to a third party. This is often a life insurance or liability insurance company. In some cases, a qualified assignment is a complex transaction that involves sophisticated calculations and requires expert assistance.


Structured settlement annuity brokers are licensed to place structured settlements on behalf of a client and are authorized by the insurers that issue the annuities. They also must follow the laws that apply to annuities and structured settlements.

The structured settlement industry is regulated by state insurance commissions, as well as federal laws that apply to structured settlements. These laws include:

Section 104(a) of the United States Internal Revenue Code, which governs how the value of periodic payments is calculated; and seven sections of the U.S. tax code that pertain to structured settlements (Section 104(a), 451, 461(h), 83 and 5891).

Individuals who receive structured settlement payments are protected by multiple laws, including the Periodic Payment Settlement Act of 1982, which allows individuals to receive their annuity payments income-tax free. Nevertheless, recipients are encouraged to consult with their attorneys and settlement consultants before entering into any type of structured settlement contract.

There are many types of structured settlement annuities available, which offer a variety of features and benefits. Typically, these annuities feature guaranteed interest rates and are structured to provide regular monthly payments for the life of the recipient. These payments are designed to help protect recipients from financial distress and to ensure their future income.

In addition, structured settlement annuities are generally considered a safer form of investment than stocks, bonds and mutual funds. They are often preferred by people who may need long-term care in the future.

However, they also carry a high degree of risk. This risk is reduced through the use of well-capitalized life insurance companies and by spreading the annuity payout among several different insurers.

Moreover, the annuity payments can be deferred or accelerated as needed. The downside to this is that if the life insurance company that issued the annuity goes under, there is no guarantee of a return on the settlement funds.

The only way to protect yourself from these risks is to work with a licensed structured settlement broker who has the experience, education and licenses necessary to properly place a structured settlement on your behalf. A qualified broker will be able to explain the pros and cons of each option available to you, and advise you on the best strategy for your needs.

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Structured settlement annuity brokers are professionals who work to secure structured settlements for clients. The goal is to help their clients get the best possible payout for their case. They also ensure that their clients can take advantage of any tax benefits associated with structured settlements.

They do this by analyzing the settlement amount, future medical and financial needs, investment markets, income tax laws and annuity contracts to ensure that the client receives the most suitable annuity option. They can also bring in special needs attorneys, insurance agents and Medicare Secondary Payer compliance experts to help make sure the settlement meets all of their clients’ needs and goals.

A good structured settlement broker should have extensive experience in the field. This includes having a thorough understanding of how the settlement market works and a thorough knowledge of the insurance companies that offer annuities.

The broker will also be knowledgeable about the complexities of calculating the present value and discount rate for a settlement. They will be able to explain the process to their clients and guide them through the process in a way that is easy for them to understand.

Another factor to consider when selecting a structured settlement annuity broker is their reputation. Having a good reputation can help you avoid scams and reduce the amount of money you lose when selling your structured settlement.

Having a dedicated service professional can also reduce the stress of this transaction, especially for people who have little financial or tax knowledge. It is important that the structured settlement company you choose has someone who can answer questions and address concerns immediately.

A structured settlement broker can provide you with a range of annuity options, including pension and medical, lottery and casino payments, deferred annuities and financial annuities. They will also take the time to explain what each type of annuity is and how they are different from other types of annuities.

The best structured settlement annuity brokers have years of experience and are members of the National Association of Settlement Purchasers, a trade group for participants in the secondary market for structured settlements. They have the skills to navigate the complicated legal and financial issues surrounding these transactions and are committed to providing excellent customer service.

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A structured settlement is a financial instrument that allows you to customize payments over your life to help cover expenses like medical care, living costs and family needs. It can also be used to pay future tax-deferred income to reduce your overall taxes or provide a lump sum for immediate cash needs such as buying a home, vehicle or taking vacations.

Structured settlements are often considered a safe place to put your money, particularly in an interest rate environment where rates can be volatile. This type of investment has the potential for high returns, but only if it is managed properly and consistently over time.

Brokers and settlement planners are typically paid a one-time commission or a percentage of the total amount of the structured settlement. This commission is usually paid to the annuity issuer (the insurance company that issues the annuity) or a co-broker.

Some brokers and settlement planners also receive an assignment fee or a qualified assignment fee. This is a fee charged by the insurance company that replaces the funding casualty insurer that issued the annuity to your client. This can range from $0 to $750.

If you decide to sell your future structured settlement payments, the company that purchases them will charge a discount rate, which is typically between 9 and 18 percent of the total value of the payments. This can be a great way to access the liquidity from your annuity, but it’s important to consider your options before selling.

When determining whether to sell your annuity, it’s helpful to speak with an experienced financial advisor or attorney. They can guide you through the process of selling your annuity and answer any questions that may arise. They can also review your settlement and explain your options. You can also download our free step-by-step guide to selling your structured settlement payments.

Jeffrey Augers
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By Jeffrey Augers

Jeffrey Augers is a highly skilled and experienced financial analyst with over 12 years of experience in the finance industry. He has a proven track record of delivering exceptional financial insights and recommendations to clients, empowering them to make informed decisions and achieve their financial goals. Jeffrey holds a Bachelor's degree in Finance from the University of Michigan, and an MBA from the Wharton School of Business.