by John Darer® CLU ChFC MSSC CeFT® RSP CLTC Updated July 24, 2026
What is a Funding Agreement?
A funding agreement is a low-risk, fixed-income B2B investment that an institutional investor may purchase similar to a period certain annuity.
In a funding agreement, one provides a lump sum to the issuer of the funding agreement in exchange for a predictable fixed return, often based on a recognized short term interest rate benchmark interest rate average calculated from estimates submitted by the leading banks around the world.
Mutual funds and pensions often purchase funding agreements because of the certainty associated with them. Other B2B areas may lend themselves to a funding agreement solution. Many of the same companies offering structured settlement annuities offer funding agreements through their appointed agents, however there are other providers.
The Non Qualified Assignment funded with a Funding Agreement Alternative Funding for Periodic Payment Settlements
Corebridge
Corebridge Finanicial underwriting companies American General Life Insurance Company and United States Life Insurance Company in the City of New York offer non qualified assignments with future periodic payment obligations funded with a funding agreement “Funding Agreement Structured Settlement”.
MeLife
- MetLife introduced its own Funding Agreement Periodic Payment Settlement for Non Qualfied Structured Settlements.
- This option is underwritten by Metropolitan Tower Life Insurance Company and using MetiLfe Assignment Company, Inc. for the non qualified assignments.
- MetLife offers the opportunity to use non qualified assignments with both an annuity and a funding agreement assignmemt. The latter enables the payee to negotiate a start date deferral of longer than the IRC 72(u) constraints permit for annuities.
For more information about funding agreements and solutions offered by 4structures.com LLC please visit Funding Agreements to Resolve B2B disputes, Environmental Clean Up, Policy Buyouts (4structures.com)
Differences Between Funding Agreement and Annuity Underwriting
- Payments for life are a possibility with an annuity, but not with a Funding Agreement. It follows that there is no medical underwriting or rated ages with funding agreements which are a possibility with structured settlement annuities.
- Financial Underwriting is required with a Funding Agreement as part of due diligence required by the issuers.
Related Reading
NQA-Flex: Flexibility in Non-Qualified Assignments – Structured Settlements 4Real®Blog April 1, 2026