Structured Settlement Companies: A Complete Guide (2026)

If you are expecting money from a personal injury claim, wrongful death case, or workers’ compensation claim, you are probably hearing a lot about “structured settlement companies” and annuities. You may be afraid of blowing a lump sum payment, confused by conflicting advice, and worried about locking in long-term financial security for yourself or a beneficiary.

This guide explains, in plain English, what structured settlement companies actually are, the three different types you will encounter, and how to choose the right one based on your goal. By the end, you will understand how to create a secure income stream, when it might make sense to sell payments, and how to vet companies so you avoid predatory deals.

Is a Structured Settlement Right for You? Start Here

A structured settlement is a way of receiving compensation from a personal injury, wrongful death, or workers’ compensation claim through periodic payments instead of one large lump sum. Those payments are usually funded by an annuity issued by a highly rated life insurance company.

Many people in your position share the same concerns. They worry about:

• Spending a lump sum too quickly or investing it poorly.
• Making sure money lasts for medical care, lost wages, or children’s future needs.
• Understanding complex terms like annuity, discount rate, or court approval.

This article is designed to be an unbiased roadmap. You will learn:

• The three types of structured settlement companies: issuers, buyers, and consultants.
• How to set up a new structured settlement for long-term stability and potentially tax-free income.
• How selling your payments works, what it really costs, and how to protect yourself.
• Which companies are considered reputable, and how to vet any company you consider.

You do not have to become a finance expert overnight. You just need a clear framework so you can ask the right questions and make informed choices.

The 3 Types of Structured Settlement Companies (And Who You Really Need)

The phrase “structured settlement company” is confusing because it is used for three very different kinds of businesses. If you do not know which type you need, it is easy to get overwhelmed or misled.

Here are the three categories:

• Issuers: Life insurance and annuity companies that guarantee your payments.
• Buyers: Factoring companies that purchase your future payments for a lump sum today.
• Consultants and brokers: Settlement planners who help design your payment structure.

The right company depends on your situation. If you are setting up a new settlement, you will mainly deal with issuers and consultants. If you already receive structured settlement payments and want cash now, you will deal with buyers.

Category 1: The Issuers (Life Insurance & Annuity Companies)

Who they are: Issuers are large, regulated life insurance companies that provide the annuity contract behind your structured settlement. They are responsible for making the periodic payments you are promised.

What they do:

• Issue an annuity that funds your structured settlement.
• Guarantee future periodic payments according to your schedule.
• Manage the underlying investments and longevity risk.

Their financial strength is crucial because your long-term security depends on their ability to honor payments for decades.

When you need them: You work with an issuer when you are creating a new structured settlement as part of resolving a claim. Often, you will not choose the issuer directly. Instead, your attorney and a settlement planner will recommend specific companies and obtain quotes.

Examples of structured settlement annuity issuers include:

• MetLife
• Prudential
• Pacific Life

These companies are typically rated by independent agencies and are known for issuing annuities that back structured settlements.

Category 2: The Buyers (Factoring Companies)

Who they are: Buyers, also called factoring companies, are specialty finance businesses that purchase your right to receive future structured settlement payments.

What they do:

• Offer you a lump sum of cash today.
• In exchange, take over some or all of your future payments.
• Charge a “discount rate,” which is the effective cost of getting cash now.

When you need them: You consider a buyer when you already have a structured settlement and you:

• Face a financial emergency or major expense.
• Want to pay off high-interest debt or avoid foreclosure.
• Need capital to relocate, modify your home, or fund education.

Examples of well-known buyers include:

• J.G. Wentworth
• Peachtree Financial Solutions

Working with a buyer requires court approval and usually means giving up more future value than you receive in cash today. Understanding the discount rate is essential, which we cover later in this guide.

Category 3: The Consultants & Brokers (Settlement Planners)

Who they are: Consultants, sometimes called structured settlement brokers or settlement planners, are intermediaries who help design the structure of your settlement. They typically work with your attorney during negotiations.

What they do:

• Analyze your current needs and future goals.
• Design a payment plan that covers medical costs, lost income, and major milestones.
• Shop among multiple issuers to find competitive quotes and financially strong companies.

When you need them: You work with a settlement planner during the initial settlement negotiation phase. They can explain the pros and cons of a lump sum versus structured settlement and help you decide how much to structure and how much, if any, to take upfront.

Examples of established settlement consultants include:

• Sage Settlement Consulting
• Atlas Settlement Group

A good planner is an educator and advocate. They should explain your options clearly, not pressure you into a specific product.

Creating Your Settlement: A Guide to Financial Security

If you are in the middle of a personal injury or wrongful death case, your main decision is how to receive your money. A structured settlement allows you to convert your award into reliable, predictable payments that can support you over many years.

Think of it as building your own customized pension. Instead of guessing how to invest a lump sum, you lock in guaranteed payments that match your life and recovery plan.

The Key Benefits: Why Choose Periodic Payments?

Structured settlements offer several advantages compared to taking your entire compensation as a single lump sum payment.

• Guaranteed income: A structured settlement funded by an annuity can provide stable, predictable payments for a set period or for life. This supports long-term financial stability and mirrors the advantage of securing retirement funds early, where planning ahead helps ensure you do not run out of money later.
• Potentially 100 percent tax-free payments: For physical injury, physical sickness, or wrongful death claims, periodic payments are generally excluded from income under Internal Revenue Code Section 104(a)(2). This typically does not apply to punitive damages or interest, so you should confirm your specific situation with a tax professional.
• Protection from mismanagement: Many recipients of large awards spend down a lump sum in just a few years, especially under stress or with pressure from others. Structured settlements create a built-in “speed limit” for spending and help protect vulnerable claimants or beneficiaries.
• Customization for your life: Payment schedules can be tailored to your needs. Examples include:
  • Monthly income to replace lost wages.
  • Lump sums at specific ages to fund college tuition.
  • Increased payments in early years when medical needs are greatest.
  • Payments that continue for a dependent or beneficiary if you pass away.

Structured settlements are not one size fits all. You can often combine a smaller lump sum for immediate needs with long-term periodic payments for security.

How to Choose a Reputable Issuer and Consultant

Your choice of issuer and consultant can affect your financial security for decades. Here is how to evaluate them.

1. Vetting your consultant or settlement planner

• Look for credentials such as Certified Structured Settlement Consultant (CSSC) or similar recognized designations.
• Ask how they are paid and whether they work with multiple issuers, not just one preferred company.
• Request examples of payment plans they have designed for cases similar to yours, such as catastrophic injury or workers’ compensation claims.
• Check for complaints or disciplinary history through professional organizations or state regulators.

A qualified planner should explain options clearly, model different payment scenarios, and work alongside your attorney rather than replacing legal advice.

2. Evaluating the issuer’s financial strength

Because issuers are life insurance companies that promise to make payments for many years, you want a company with strong independent ratings. A key resource is A.M. Best, which evaluates insurers’ financial stability.

• Look for an A.M. Best financial strength rating of A+ or A++, which indicates a superior ability to meet ongoing obligations.
• Ask your consultant to provide rating information for each proposed issuer.
• Compare ratings across several companies before agreeing to any annuity.

This mindset is similar to evaluating products for using a life insurance product as a retirement plan. In both cases, you rely on the insurer’s long-term stability to fund future income, so financial strength and reputation matter a great deal.

3. Red flags to watch for

• High-pressure sales tactics or claims that you must sign “today” to get a special deal.
• Lack of transparency about fees, commissions, or how the annuity is priced.
• Reluctance to provide written illustrations of payment schedules.
• Unwillingness to coordinate with your attorney or answer detailed questions.

If anything feels rushed or unclear, slow the process down. A structured settlement is a long-term commitment, and you are entitled to understand every aspect before you agree.

Selling Your Settlement: When You Need Cash Now

Life can change in ways no one expected when your settlement was first designed. You might face a medical emergency, job loss, or a chance to buy a home. In those cases, selling some of your structured settlement payments to a factoring company can provide needed liquidity, but it comes with trade-offs.

This section focuses on what you need to know before you give up future periodic payments for a lump sum today.

The Pros and Cons of Selling Your Payments

Potential benefits of selling structured settlement payments:

• Immediate cash for urgent needs: You can access money quickly for medical care, housing, or to avoid foreclosure or repossession.
• Paying off high-interest debt: Using a lump sum to eliminate expensive credit card or personal loan debt may improve your monthly budget.
• Funding a major life goal: Money from a sale can help with a down payment on a home, career retraining, or starting a small business, though all of these involve risks.

Key drawbacks and risks:

• You receive less than the total future value: Buyers discount your future payments at a relatively high rate. The difference between what you give up and what you receive is the real cost of the transaction.
• Loss of long-term security: Once you sell payments, that income stream is gone. If you sell too much, you may struggle later when you need the money most.
• Time and legal process: Every sale requires court approval, which can take weeks or months. You must attend a hearing in many states and explain why the sale is in your best interest.

Selling can be helpful in the right situation, but it is rarely a simple or cheap way to get cash. Weigh the pros and cons carefully and consider alternatives first.

Understanding the Discount Rate: The Real Cost of Selling

The discount rate is the core concept in any structured settlement sale. It represents the effective annual cost that the buyer charges for giving you a lump sum today instead of the full value of your future payments.

In simple terms, the higher the discount rate, the less you receive now for the payments you sell.

• Typical discount rates might range from around 8 percent to 18 percent or even higher, depending on the company, your payment schedule, and market conditions.
• Some offers can be much more expensive, especially from predatory buyers, so you should always compare multiple quotes.

Here is a simplified example:

• Suppose you are due to receive $100,000 in total future payments over the next several years.
• A buyer might offer you only $50,000 to $70,000 today, depending on the discount rate and when those payments are due.
• The gap between $100,000 and what you receive is effectively the price you pay for liquidity.

Ask every buyer to show you, in writing:

• The total future value of the payments you are selling.
• The discount rate and any additional fees.
• The net lump sum you will receive after all costs.

Use these numbers to compare offers side by side. Even a few percentage points difference in the discount rate can mean thousands of dollars more or less in your pocket.

The Legal Process: Why Court Approval is Required

In the United States, the sale of structured settlement payment rights is regulated at both the federal and state level. Every sale requires court approval because lawmakers view these transactions as significant financial decisions with long-term consequences.

Court oversight is intended as a consumer protection measure. The judge must find that the transfer is in your “best interest,” taking into account your financial needs, dependents, and whether the discount rate is reasonable.

The general steps look like this:

1. Get multiple quotes: Contact several factoring companies and request written offers that show the discount rate, fees, and net lump sum.
2. Choose a buyer and sign a purchase agreement: Review the contract carefully, preferably with an independent attorney or financial advisor who does not work for the buyer.
3. The buyer files a petition with the court: The company’s lawyers handle most of the paperwork, including notifying the annuity issuer and any other interested parties.
4. Attend a hearing: You may need to appear before a judge and explain why the sale is necessary and how you will use the funds.
5. Receive court approval or denial: If approved, the order is sent to the insurer and the buyer, and you eventually receive your lump sum. If denied, you keep your existing payment structure.

Remember that the judge is there to protect you, not the buyer. Be honest about your situation, and do not be afraid to say no if a deal no longer feels right.

Vetting Checklist: How to Avoid Predatory Practices

Whether you are setting up a new structured settlement or selling existing payments, choosing the right company is critical. Use this checklist to separate reputable firms from those that may not have your best interests in mind.

For Issuers (When Setting Up)

• Check A.M. Best financial strength rating: Confirm that the life insurance company issuing your annuity has an A.M. Best rating of A+ or A++. Strong ratings indicate a greater ability to meet long-term obligations.
• Confirm membership in the National Structured Settlements Trade Association (NSSTA): Many reputable companies and consultants are members of NSSTA, a trade group that promotes ethical standards in the structured settlement industry.
• Review history and size: Consider how long the insurer has been in business and its overall reputation in the annuity and life insurance marketplace.

For Buyers (When Selling)

• Check Better Business Bureau (BBB) rating: Look for a strong BBB rating and read through customer reviews and complaint history to identify patterns of concern.
• Verify membership in the National Association of Settlement Purchasers (NASP): Reputable buyers often belong to the National Association of Settlement Purchasers (NASP), which has standards for ethical conduct and consumer protection.
• Get multiple quotes: Contact several factoring companies and compare discount rates, fees, and net lump sums. Do not assume the first offer is the best.
• Never pay upfront fees: Legitimate buyers typically deduct their compensation from the transaction proceeds. Be wary of anyone asking for money before the deal closes.
• Consult an independent advisor: Before you sign any contract, talk with a financial advisor or attorney who does not work for the buyer. Their job is to represent your interests, not the company’s bottom line.

Trust your instincts as well. If a representative will not answer questions clearly, rushes you to sign, or discourages you from seeking independent advice, consider that a major warning sign.

Top Structured Settlement Companies by Type

This section provides example companies by category, based on public market presence, financial ratings, and industry reputation as of 2025. This is not a personalized recommendation or a complete list. You should always conduct your own due diligence, verify current ratings, and consult professionals before choosing any company.

Leading Structured Settlement Annuity Issuers

These life insurance companies are widely recognized as major issuers of annuities used in structured settlements. Always confirm current financial strength ratings from A.M. Best and other agencies before proceeding.

• MetLife – A large, global insurer with a long history of issuing annuities and life insurance products.
• Prudential – Known for retirement and income solutions, including annuities that can fund structured settlements.
• Pacific Life – A major annuity provider with a strong focus on long-term income products.
• New York Life – A highly rated mutual insurer that issues various annuity products and has a long-standing market presence.

These examples illustrate the type of large, established insurers typically used in structured settlements. Your settlement planner and attorney can help you compare specific proposals.

Reputable Structured Settlement Buyers

Factoring companies purchase structured settlement payment rights. When evaluating any buyer, look at BBB ratings, NASP membership, and customer reviews, and always compare multiple offers.

• J.G. Wentworth – One of the most widely known buyers of structured settlement and annuity payments.
• Peachtree Financial Solutions – A national company that purchases structured settlement and lottery payment streams.
• DRB Capital – A buyer that focuses on structured settlements, annuity payments, and other cash flow purchases.
• Stone Street Capital – An established company in the payment purchasing market.

This list is a starting point for research, not an endorsement. Take your time, request written quotes, and have an independent professional review any contract before you proceed.

Established Settlement Consulting Firms

Settlement planners and consultants help design structured settlements. They typically work with plaintiffs and attorneys to create customized payment plans.

• Sage Settlement Consulting – A national firm specializing in settlement planning for injury victims and their families.
• Atlas Settlement Group – A structured settlement consulting firm known for working with plaintiffs, attorneys, and insurers.
• Arcadia Settlements Group – Another large consulting firm focused on settlement planning for personal injury and workers’ compensation cases.

When selecting a consultant, focus on credentials, experience with cases like yours, and their willingness to explain all options, including the pros and cons of structuring versus taking more money upfront.

Frequently Asked Questions About Structured Settlements

What happens if the life insurance company (issuer) goes bankrupt?

If an annuity issuer becomes insolvent, each state has a safety net through State Guaranty Associations. These associations provide limited protection to policyholders, usually up to a specific dollar cap per person per company, which varies by state. You can learn more about how this works and find your state’s association through the State Guaranty Associations resource maintained by the National Organization of Life & Health Insurance Guaranty Associations (NOLHGA).

However, guaranty coverage is not unlimited, and it should not be your primary defense. The best protection is choosing a financially strong insurer in the first place and diversifying if you are receiving very large settlements.

Are structured settlement payments really 100% tax-free?

In many cases, yes. For personal physical injury, physical sickness, or wrongful death claims, structured settlement payments are generally excluded from federal income tax under Internal Revenue Code Section 104(a)(2). The same rule often applies whether you receive a lump sum or periodic payments, as long as the structure is set up correctly.

However, there are important exceptions:

• Punitive damages are normally taxable.
• Interest earned on invested settlement proceeds may be taxable.
• Payments stemming from non-physical injuries, such as certain employment or discrimination claims, may be treated differently.

Because tax rules can be complex and fact-specific, it is wise to confirm your situation with a tax professional before finalizing any settlement structure.

Can I sell only a portion of my settlement payments?

Yes. Partial sales are common and often safer than selling your entire structured settlement. You can sell:

• A specific number of future monthly payments.
• Certain lump-sum payments scheduled for future dates.
• A percentage of each payment stream, depending on how your structure is set up.

A partial sale lets you access cash now while preserving some long-term income. This approach can help balance immediate needs with future security, particularly if you rely on your structured settlement as a core part of your budget.

Who buys structured settlements?

Structured settlements are purchased by factoring companies, which are specialty finance firms. These companies buy the right to receive some or all of your future payments and in return give you a discounted lump sum today.

When you hear advertising lines like “It is your money, use it when you need it,” those companies are referring to the process of buying your structured settlement payment rights. Always remember that this is a business transaction for them. Their goal is to earn a profit through the discount rate, so you must shop around and protect your own interests.

What are the main alternatives to a structured settlement?

The main alternative is to take more or all of your compensation as a lump sum payment and then manage or invest it yourself. Common approaches include:

• Placing some or all of the money in a high-interest savings account for liquidity and short-term goals.
• Investing through diversified portfolios such as mutual funds, ETFs, or other securities for potential growth.
• Using trusts, such as special needs trusts, to protect eligibility for certain benefits and provide professional management.

These alternatives can offer more flexibility and possibly higher returns but also come with market risk, management fees, and the possibility of misusing or depleting funds. Structured settlements, by contrast, emphasize guaranteed income and predictable, often tax-free payments, which can be especially valuable for those who need long-term financial stability.

Your Next Step: Securing Your Financial Future

Choosing among structured settlement companies is not about finding one “best” name on a list. It is about matching the right type of company to your specific goal.

• If your priority is long-term security, you focus on strong annuity issuers and qualified settlement consultants to design a structure that protects you and your family.
• If you need immediate cash, you deal with structured settlement buyers, but you must understand discount rates, compare multiple offers, and guard against predatory practices.

Always remember the three key roles:

• Issuers provide the annuity that funds your periodic payments.
• Buyers purchase payment rights when you sell for a lump sum.
• Consultants and planners help design and negotiate your settlement structure.

Before you make any final decision, speak with your attorney, and consider consulting a Certified Financial Planner or a Certified Structured Settlement Consultant. Their job is to help you align your settlement with your long-term health, family, and financial goals so that the money you fought for truly supports your future.