Devoted to understanding the basics and fundamentals of investing

If you have an annuity and need the liquidity, does a structured settlement make sense?  I would have to conclude, that it depends on your need.  Usually, using a third party to buy all or part of your annuity for a lump sum will be expensive.  Your need should be great and your options few for this to make sense.

When you bought the annuity, the insurance company you bought it from included a profit in the calculation of how much money they would pay you each month.  This profit reduces the amount you get paid - the stream of future payments.  

If you take this reduced amount and ask someone to buy it from you, they will discount the payments back to the future and it will end up being a smaller amount than you paid.  In addition, the company that is buying it from you will include their profit in the calculation, so you will receive less still.
If interest rates have gone up during the period you owned the annuity, the discount factor used to calculate the present value will also go up.  This will reduce the lump sum even more.  Also, you have the risk that your insurance company has a worse credit rating than it had at the time of your purchase.

So, when all is said and done, if your need is great and you don't have other cheaper options, taking a structured settlement may make sense.  Otherwise, use the less expensive option.

That's my story and I'm sticking to it.