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Annuities and Structured Settlements: What’s the Difference?

Annuities and structured settlements have many similarities, and you might even make the mistake of thinking they are the same thing. Sure, they both pay regular payments to the people they are owed to over a specified time period, but the way state and federal laws see these two types of payments confirms that they are indeed different things. Let’s examine annuities and structured settlements and see exactly what the difference is.

Structured Settlements: An Examination

Basically, structured settlements are the result of winning a liability or personal injury lawsuit, and payments are set up to be made over an agreed upon period of time until the full amount due has been paid. These payments are made from a lump sum amount that the defendant, who has either settled or been found guilty, has set aside to satisfy the lawsuit. The term for this is “deferred payments”.

Annuities: A Closer Look

The financial tools investment firms, insurance companies, and the like use for administering payments are called “annuities”. Annuities are an investment in which the investor earns returns, in addition to the original investment amount, and which can have many beneficiaries. There are many different types and styles of annuities, and even lottery winnings can fall into this category if the winner chooses payments instead of a lump sum payment of their winnings.

Important Information

Once you get down to carefully comparing the two, the differences between structured settlement payments and annuities can be pretty glaring. As a beneficiary of a structured settlement or annuity payment, how do these differences affect you and your financial future?

Where you live, and how state and federal law apply to your individual transfer, will help determine how they affect you. The law will often allow the sale of structured settlement payments, but it can be different in the case of annuities. The process of selling an annuity can be difficult and confusing, which is why the expert advice of a settlement broker can be essential for helping you meet your transfer goals.

Working with a competent and skilled broker may be the best decision for someone who is considering selling their annuity. A broker with the reputation for competent, high-quality customer service and is a registered member of the Better Business Bureau can provide their clients with all the help they need to navigate the murky waters of transferring an annuity or structured settlement payment.

If you need help selling your structured settlement, annuity or lottery payments,
contact us today. We are here to answer your questions and help you obtain the
highest possible price for your payments.

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