Disadvantages of Structured Settlement

• Cannot be changed or accelerated:  Structured settlement annuities are very flexible in design but, once funded, cannot be accelerated or changed for any reason.

• High discounts rates when sold: The only way to access liquidity from a structured settlement annuity is to sell all or a portion of the future payments. These transactions, called factoring, usually require annuitants to sell payments for a heavily discounted lump sum amount.

• Low relative rate of return:  Structured settlement annuities compare well against traditionally safe investments such as bonds. However, when compared to more risky options like securities they do not always fare as well.