by Structured Settlement Watchdog
What's the difference between structured settlements and annuities?
JG Wentworth gets partial credit in a recent Facebook post, but the 800 lb gorilla gets an incomplete for dropping the banana on structured settlements:
- Annuities are an insurance product designed to secure a fixed income stream,
starting either immediately or in the future. - Structured settlements are a type of annuity that results from a lawsuit.
Why doesn't JG Wentworth Get Full Credit for Structured Settlements 101?
1. A structured settlement IS NOT an annuity
2. According to IRC 5891, the section of the Internal Revenue Code that is the "Mack Daddy" at the core of the stuctured settlement factoring business, JG Wentworth's business:
With all due respect to Axar, who indeed is their Daddy, what does JG Wentworth's Mack Daddy (IRC) say?
IRC 5891 (c)(1) states "The term “structured settlement” means an arrangement— 
A) which is established by—
(i) suit or agreement for the periodic payment of damages excludable from the gross income of the recipient under section 104(a(2), or (ii) agreement for the periodic payment of compensation under any workers’ compensation law excludable from the gross income of the recipient under section 104(a)(1), and
(B) under which the periodic payments are—
(i) of the character described in subparagraphs (A) and (B) of section 130(c)(2), and
(ii) payable by a person who is a party to the suit or agreement or to the workers’ compensation claim or by a person who has assumed the liability for such periodic payments under a qualified assignment in accordance with section 130.
So no, we're NOT speaking about
1. An arrangement of flowers
2 dead gourds for the harvest arrangement (after all it is almost the season), or
3. an arrangement of music, such as the Viking chorus in JG Wentworth commericals
While a structured settlement is not an annuity, a structured settlement is often funded with an annuity
In the context of structured settlements an annuity is one of the acceptable forms of qualified funding asset
[see IRC 130(d)]