If you’ve received a structured settlement, you might be wondering about the best options for managing it.
In some cases, structured settlement recipients may look to annuity companies to help them manage their funds effectively.
Structured settlement annuity companies are the organizations that provide the payments or annuities in exchange for a lump sum of money upfront. Understanding how these companies work and how to choose the right one can make a huge difference in your financial security.
In this article, we’ll walk you through what structured settlement annuities are, how they work, and what to look for in a reliable annuity company.
What is a Structured Settlement?
A structured settlement is an arrangement where a party agrees to make periodic payments over time instead of a lump sum to settle a legal claim or lawsuit.
Often, this type of settlement is seen in personal injury cases, workers’ compensation claims, or wrongful death lawsuits.
The defendant (or their insurance company) typically sets up the structured settlement, which is then administered by an annuity provider.
The structured settlement is designed to provide a steady stream of income, often for the recipient’s lifetime or for a set period of time.
The payments may cover specific needs, like medical bills, education, or living expenses.
How Structured Settlement Annuity Companies Work
When you win a structured settlement, the funds are often paid out in the form of an annuity.
Annuities are financial products that allow the recipient to receive periodic payments over time.
A structured settlement annuity company is responsible for managing the annuity and ensuring the recipient gets the payments.
Here’s how it works:
- Agreement:
The claimant (you) and the defendant (or their insurance company) come to an agreement on the settlement amount and payment schedule. - Annuity Issuance:
The defendant or insurance company buys an annuity from a structured settlement annuity company.
The annuity company then guarantees the future payments to the claimant. - Payment Plan:
Payments are scheduled according to the terms of the agreement. They can be monthly, annual, or lump sum, depending on the settlement agreement. - Tax-Free Status:
Structured settlements in the U.S. are typically tax-free, meaning the claimant doesn’t pay taxes on the payments they receive (unless they sell the settlement or the payment structure is changed).
Top Structured Settlement Annuity Companies (2025)
Choosing the right structured settlement annuity company is critical for your financial well-being.
Here are some of the top players in the market, known for their reliability, customer service, and financial strength:
1. MetLife
MetLife is one of the largest and most reputable insurance companies in the U.S., with decades of experience in structured settlements.
Their annuities are highly customizable, allowing you to tailor the payment schedule to your needs.
MetLife offers options for both fixed and variable payments, making them a solid choice for structured settlement recipients.
- Pros: Reliable, customizable annuities, high financial strength ratings.
- Cons: Some fees may apply if you choose to sell the annuity.
2. Prudential
Prudential is another well-established financial institution, known for offering structured settlement annuities that provide financial security and flexibility.
They have a strong reputation for customer service and their ability to customize payment plans for claimants.
Prudential also offers investment options that may appeal to recipients looking for growth potential.
- Pros: Strong customer service, flexibility in payment options, customizable annuities.
- Cons: Slightly higher fees compared to other companies.
3. New York Life
As one of the largest and most trusted life insurance providers in the world, New York Life offers high-quality structured settlement annuities.
They provide a variety of payout options, including lifetime payments, fixed-period payments, and lump sum options.
New York Life is known for its financial stability and long-term commitment to its clients.
- Pros: Strong financial ratings, variety of payout options, reputation for reliability.
- Cons: Slightly more conservative investment options.
4. AIG
American International Group (AIG) has a long history of providing structured settlement annuities to claimants.
They offer a variety of annuity products, including fixed and immediate annuities.
AIG’s annuities are particularly appealing to those seeking stability and security in their long-term payments.
- Pros: Solid financial ratings, multiple annuity options, good customer service.
- Cons: Limited investment flexibility.
5. Jackson National Life
Jackson National Life is well-known for its competitive annuity products, including structured settlement annuities.
They offer flexible payout structures, allowing recipients to adjust their payments based on their changing financial needs.
Jackson National Life’s strong ratings and reputation for excellent customer service make them a top choice for many structured settlement recipients.
- Pros: Competitive rates, flexible payout options, strong reputation.
- Cons: May have higher fees for some annuity products.
What to Look for in a Structured Settlement Annuity Company
Choosing the right structured settlement annuity company can significantly impact your financial future.
Here are the key factors to consider before making your decision:
1. Financial Strength and Stability
The annuity company must have strong financial ratings to ensure they can meet their long-term payment obligations.
Check the company’s ratings from agencies like A.M. Best, Moody’s, or Standard & Poor’s.
These agencies assess an insurance company’s ability to pay claims, and higher ratings indicate a more reliable company.
2. Customer Service and Support
The quality of customer service is crucial when selecting an annuity company.
You want to work with a company that is easy to contact and responsive to your needs.
Check online reviews, ask for referrals, and research the company’s customer support reputation before committing.
3. Customization Options
Different structured settlements come with different needs.
Look for a company that offers flexible annuity products that can be tailored to your specific financial situation.
Consider whether you need fixed or variable payments, a lump sum payout, or a combination of both.
4. Transparency in Fees
Some structured settlement annuity companies charge fees if you decide to sell your settlement or make changes to your payout schedule.
Be sure to ask about any fees upfront and read the fine print before signing anything.
Transparency in fee structures can save you a lot of money in the long run.
5. Reputation and Experience
Choose a company with a proven track record in managing structured settlements.
Look for established, reputable companies with extensive experience in handling annuity-based settlements.
Can You Sell Your Structured Settlement Annuity?
Yes, you can sell your structured settlement payments to a third-party buyer, often referred to as a settlement purchaser or factoring company.
While this option may give you immediate cash, it’s important to understand the potential trade-offs.
When you sell your structured settlement, you may not get the full value of the settlement — typically, the buyer will offer a lump sum that’s lower than the total value of the remaining payments.
Before selling, make sure to consult with a financial advisor or lawyer to understand the long-term consequences.
Conclusion
Structured settlement annuity companies play a critical role in providing ongoing financial support to individuals who have settled legal claims.
By understanding how these companies work and what to look for, you can ensure that your structured settlement provides you with the security and flexibility you need.
Whether you choose to keep your annuity or sell it, selecting a reputable, financially stable annuity provider is key to making the most out of your settlement.