Structured Settlements 4Real®Blog 2026

by Structured Settlement Watchdog

The plot continues to thicken at the expense of those who enter into structured settlement agreements, who later have an immediate need for cash and have exhausted other options.

It is looking more and more from our research that the majority of structured settlement annuity issuers refuse to split annuity payments (i.e. pay to more than one party) when there is structured settlement factoring transaction

This practice is a relic of the days before structured settlement protection acts.

• The only logical explanation is for the life insurance company to save administrative costs.
• There seems to be no benefit to its insured/annuitant, other than as the only current solution to the problem of someone who WANTS TO MINIMIZE the erosion of their long term financial security. In other words the annuitant seeking to raise cash to relieve a debt burden, still likely wants to keep as much of their structured settlement intact as possible.
• The refusal to split payments under such circumstances contradicts established life insurer business practice which often results in structured settlement payments to multiple parties in the same case (e.g. members of a family in a wrongful death case, or where a portion of payments go to a trust for a period of years and another go to an individual).
• With a servicing agreement the result is that the entire annuity payment goes from the annuity issuer to the servicing factoring company. My two part podcast to be released by LBN shortly deals with the question of what happens in the event of Chapter 7 bankruptcy of the servicing company. Now we've got another issue. 

Our sources tell us that factoring companies that service structured settlement payment sometimes include right of first refusal clauses, which give the servicing factoring company right of first refusal on subsequent structured settlement transfers

I've been told that in some cases there is a need for money to move from any competitor of the servicing factoring company "to get their blessing" in order to override the first refusal.

Clearly this presents a problem for two reasons

1. acts as a potential barrier to a better offer, for an individual with a legitimate subsequent cash need
2. adds to the cost of the second transaction.

There is a question as to whether what amounts to a vig payment is disclosed

I know that I count many representatives of life insurers among my readers. I hope you are reading this post.

The "powers that be" need to consider what happens "the morning after" there is a refusal to split payments.