A typical structured settlement arises and is structured as follows:


An injured party (the claimant or plaintiff) settles a law suit with the defendant- and most commonly this also includes its insurance carrier.  Then, the parties enter into a settlement agreement that provides for a series of periodic payments to be made over time from the defendant to the claimant or plaintiff.


In exchange for the claimant’s securing the dismissal of the lawsuit, the defendant (or, more commonly, its insurer) agrees to make a series of periodic payments over time.  The defendant, or more commonly the property/casualty insurance company that insures the defendant, thus finds itself with a long-term payment obligation to the claimant.

Court Order:

Because the defendant, and by extension its insurance company, is a party to a lawsuit and subject to a court order to make future payments to settle the lawsuit, these future payments are generally considered to be senior obligations on the paying party, and the insurance company would be in contempt of court if the payments are not made.


To ensure that these obligations are met, the property/casualty insurer generally takes one of two approaches to assign its liability.  Click on if you want more details on Assignment of Structured Settlements.


In either an assigned case or an unassigned case, the safety of the payments is primarily guaranteed by the life insurance company making the annuity payments.  That is the first line of guarantee that the original plaintiff or claimant has settling their lawsuit.

A secondary level of guarantee exists in the form of the annuity owner.  In the case of qualified assignments, the annuity owner accepts a liability to fund this future payment obligation and offsets that with the purchase of an annuity.  In unassigned cases, such as our City of Chicago example, the City of Chicago is ultimately responsible for making the payments to settle this claim.

In both cases, the original claimant has recourse both to the annuity company and to the annuity owner or the original defendant if the payments are not made.  What is most important is that you as the buyer of structured settlement payment right have the same rights of recourse.

What’s It Mean To You:

Fundamentally as the buyer of a structured settlement payment right, you become the new assignee of an existing payment stream funded by an annuity issuer, backed by an annuity owner, and all subject to a court case settling a valid claim.

As the new assignee under a settlement funded by an annuity (A Structured Settlement Annuity) you are entitled to all the payments that the original defendant assigns to you.  These payments are unequivocal, and failure to make these payments would be a contempt of court by the annuity issuer, and an obligation upon the annuity owner.

Because of these payments are bought at a discount, this is truly a high-yield, safe investment.

Be sure to sign up to this website to get access to the world’s largest inventory of available Secondary Market Annuities and be protected by the best buyer focused purchase process in the industry.