Structured settlements offer long-term financial security to plaintiffs in personal injury or accident lawsuits. But sometimes, recipients choose to sell their payments in exchange for a lump sum. On the other side, companies and investors buy structured settlements as an investment opportunity. This guide covers how structured settlements work, who buys them, why, and what legal protections are in place.
🏦 What Is a Structured Settlement?
A structured settlement is a legal financial arrangement where a plaintiff receives scheduled payments over time rather than a single lump sum after winning a lawsuit—commonly seen in:
- Personal injury or wrongful death cases
- Workers’ compensation settlements
- Medical malpractice or product liability cases
These payments are usually backed by annuities from major insurance companies.
💼 Why Do People Sell Structured Settlements?
Many people who receive structured settlements choose to sell future payments because they need immediate cash. Common reasons include:
- Paying off medical bills or debt
- Buying a home or starting a business
- Handling family emergencies or college tuition
- Avoiding high-interest personal loans
Instead of waiting years for payments, they get a lump sum now—but usually at a discount.
💸 Who Buys Structured Settlements?
There are two types of buyers:
1. 🏢 Structured Settlement Companies (Factoring Companies)
These companies purchase structured settlements in exchange for lump-sum payments. Examples:
- J.G. Wentworth
- Peachtree Financial
- Fairfield Funding
- Stone Street Capital
They resell or package these future payment streams to institutional investors.
2. 🧑💼 Private Investors / Firms
Some accredited investors or hedge funds buy structured settlements as stable, fixed-income investments. These payments often provide predictable returns with minimal risk.
📈 Is Buying Structured Settlements Legal?
Yes—but it’s heavily regulated.
Each transaction:
- Must be approved by a judge to protect the seller
- Must comply with state-specific structured settlement protection acts
- Is often reviewed for fair pricing and financial necessity
Buyers must disclose fees, interest rates, and payout terms.
🔍 How Do Companies Buy Structured Settlements?
Here’s how the process typically works:
- 📝 Seller requests a quote from the buying company
- 💰 Company offers a lump sum for part or all of the future payments
- 🏛️ A judge reviews the sale in court to ensure it’s in the seller’s best interest
- ✅ If approved, the buyer pays the seller and takes ownership of the future payments
📊 Example: Structured Settlement Purchase Scenario
Let’s say Jane has a settlement paying her $2,000/month for 10 years ($240,000 total). A company may offer her $130,000–$170,000 lump sum depending on:
- Discount rate
- Payment schedule
- Legal and court fees
- State laws
⚠️ Risks and Legal Concerns
For buyers:
- Legal delays or court rejections
- Seller bankruptcy or fraud
- State-specific restrictions
For sellers:
- Losing long-term security
- Getting low lump sums from predatory offers
That’s why it’s important for both parties to work with experienced legal and financial advisors.
✅ Should You Buy a Structured Settlement?
Buying structured settlements can be a stable, low-risk investment for:
- Pension funds
- Insurance companies
- Private investors seeking fixed-income assets
But make sure:
- You’re purchasing from reputable companies
- The court has approved the transfer
- All risks are assessed with the help of legal counsel
🔍 Top Companies That Buy Structured Settlements in 2025
| Company | Location | Highlights |
|---|---|---|
| J.G. Wentworth | Nationwide | Largest buyer with years of experience |
| Peachtree Financial | FL, USA | Known for quick payments |
| Stone Street Capital | Maryland | Competitive lump sum offers |
| DRB Capital | Florida | Custom quote calculators |
| Olive Branch Funding | California | Personalized evaluations |
🧾 Final Thoughts
If you’re looking to buy a structured settlement in 2025, it can be a rewarding investment—if done legally and ethically. Whether you’re a company or private investor, make sure every deal is court-approved, fairly priced, and fully transparent.
⚖️ Important: Always involve legal experts when dealing with structured settlements to ensure compliance and protect all parties involved.