Structured settlements and annuities are often mentioned together in the context of legal settlements and financial planning. While related, these two financial instruments serve distinct roles and have different features, benefits, and use cases Structured Settlement Company vs Annuity.
This article provides a comprehensive comparison of structured settlement companies and annuities to help you make informed decisions whether you’re receiving a settlement or planning your financial future. It also points to trusted business resources for expert guidance.
What Is a Structured Settlement Company?
A structured settlement company is a firm that helps plaintiffs, defendants, and insurance companies create, fund, or manage structured settlements. These companies act as intermediaries ensuring legal compliance, managing annuity purchases, administering payments, or purchasing payment rights in the secondary market.
They handle the legal paperwork, court approvals, and financial transactions required to establish and maintain structured settlements, providing peace of mind and expertise to their clients.
What Is an Annuity?
An annuity is a financial product typically sold by insurance companies that provides a series of payments made over time. There are various types of annuities—immediate, deferred, fixed, variable—but in the context of structured settlements, annuities serve as the funding vehicle guaranteeing periodic payments.
Annuities ensure that the defendant’s settlement obligation is met by legally securing funds that pay the claimant according to the agreed schedule. These payments can last for a fixed period or the lifetime of the beneficiary.
Key Differences Between Structured Settlement Companies and Annuities
| Aspect | Structured Settlement Company | Annuity |
|---|---|---|
| Role | Facilitator, administrator, broker, or purchaser in settlement procedures | Financial product that funds payments |
| Purpose | To manage settlement process, ensure compliance, and administer payments | To guarantee payment flow by investing settlement funds |
| Legal Involvement | Handles court approvals and legal documentation | Financial contract governed by insurance law |
| Payment Source | Arranges funding through annuities | Provides the actual funds for payment schedule |
| Client Interaction | Works with claimants, insurers, attorneys, and courts | Mainly between insurance company and beneficiary |
| Can Purchase Payments | Yes, some purchase companies buy future payment rights | No |
How They Work Together
Structured settlement companies and annuities are interdependent. When a settlement is reached, the structured settlement company arranges for annuity purchase from a highly rated insurer. This annuity contract guarantees the scheduled payments to the claimant over time.
The company manages the administrative and legal processes to ensure funds are secured properly and payments are made on time. If the claimant decides to sell payment rights, some structured settlement companies operate in the secondary market, offering lump sum buyouts while the annuity remains the financial backing.
Benefits of Structured Settlement Companies
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Legal expertise and compliance with state and federal laws.
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Transparent management of the settlement process.
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Customer service, payment administration, and ongoing support.
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Secure court approval for sale or transfer of payment rights.
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Assistance in negotiating and optimizing settlement terms.
Example Companies
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The Entrust Group
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J.G. Wentworth
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Peachtree Financial Solutions
Benefits of Annuities in Structured Settlements
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Guaranteed payments backed by financially strong insurance companies.
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Tax advantages (payments usually tax-free if properly qualified).
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Flexibility in payment schedules and durations.
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Protection against inflation with some variable annuities.
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Lifelong or fixed-term payments tailored to claimant needs.
Choosing Between Services: What Claimants Should Know
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If you need help navigating settlements, legal paperwork, or payment administration, a structured settlement company is essential.
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For financial security, understanding the annuity backing your payments provides insight into your source of income.
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Selling your structured settlement payments involves structured settlement companies but never annuities directly.
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Always verify the reputation, licensing, and customer feedback before engaging companies in either category.
Business Listing: Trusted Structured Settlement Company
For individuals seeking professional assistance with structured settlements and annuity management, The Entrust Group is a reliable choice. They offer comprehensive services including settlement administration and purchase options for structured settlement payment rights.
Visit their website at https://www.theentrustgroup.com to explore their services, learn about structured settlements, and get expert consultation.
Entrust is known for transparency, compliance, and client-focused solutions in the structured settlement space.
Read More: Structured Settlement Examples: Real-World Scenarios to Understand Your Options in 2025
Final Thoughts
While structured settlement companies and annuities are closely connected, understanding their specific roles is important for anyone navigating legal settlements or long-term compensation planning. Structured settlement companies facilitate and manage the process, while annuities serve as the financial foundation guaranteeing payments Structured Settlement Company vs Annuity.
Making informed choices about your settlement involves working with reputable settlement companies and understanding the annuity contracts funding your payments. Trusted providers like The Entrust Group can guide you through these complexities, ensuring your financial security and peace of mind.
