Structured Settlement Companies 2026 October
Pass your Structured Settlement Companies exam on the first attempt. 💡 Practice questions with detailed answer explanations, hints, and instant scoring.
Key Takeaway: Structured Settlements certification demonstrates expertise in this field. Most candidates spend 4-8 weeks preparing with practice tests and study guides before taking the exam.
- ✓Review the official Structured Settlements exam content outline
- ✓Take a diagnostic practice test to identify weak areas
- ✓Create a study schedule (4-8 weeks recommended)
- ✓Focus on your weakest domains first
- ✓Complete at least 3 full-length practice exams
- ✓Review all incorrect answers with explanations
- ✓Take a final practice test 1 week before exam day
- +Industry-recognized credential boosts your resume
- +Higher earning potential (10-20% salary increase on average)
- +Demonstrates commitment to professional development
- +Opens doors to advanced career opportunities
- −Exam preparation requires significant time investment (4-8 weeks)
- −Certification fees can be $100-$400+
- −May require continuing education to maintain
- −Some employers may not require certification
Sample Structured Settlements Practice Questions
Try these questions from our free Structured Settlements practice tests. The correct answer and an explanation follow each question.
Under IRC §5891, what federal excise tax is imposed on factoring companies that purchase structured settlement payment rights without court approval?
- A. 5%
- B. 10%
- C. 25%
- D. 40%
Answer: D. 40%
IRC §5891 imposes a 40% excise tax on the factoring discount amount for any transfer of structured settlement payment rights that does not comply with the applicable state SSPA and obtain court approval.
What is the typical legal structure used by factoring companies to resell purchased structured settlement payment rights to investors?
- A. Direct sale of the annuity contract
- B. Securitization — pooling payment rights into asset-backed securities sold to institutional investors
- C. A limited partnership interests offering to retail investors
- D. A mutual fund investing in structured settlement annuities
Answer: B. Securitization — pooling payment rights into asset-backed securities sold to institutional investors
Factoring companies commonly pool acquired payment rights and issue asset-backed securities, allowing institutional investors to purchase interests in the diversified pool of structured settlement cash flows.
What is 'present value' as used by factoring companies when pricing a purchase of structured settlement payments?
- A. The total of all future payments being purchased
- B. The lump sum a factoring company will pay today, which equals the future payments discounted back at the factoring company's required rate of return
- C. The original cost of the annuity to the defendant
- D. The IRS-approved value of the payment stream
Answer: B. The lump sum a factoring company will pay today, which equals the future payments discounted back at the factoring company's required rate of return
The factoring company calculates the present value of the payment stream at its own discount rate (profit margin included) to arrive at the purchase price it will offer the payee.
A structured settlement for emotional distress claims with no underlying physical injury would result in:
- A. Fully tax-free periodic payments under IRC 104(a)(2)
- B. Fully taxable periodic payments as ordinary income
- C. Capital gains treatment on the growth portion only
- D. A 50% exclusion under IRS Notice 95-45
Answer: B. Fully taxable periodic payments as ordinary income
Without an underlying physical injury or physical sickness, emotional distress damages do not qualify for the IRC Section 104(a)(2) exclusion and are taxable as ordinary income.
About the Author
Attorney & Bar Exam Preparation Specialist
Yale Law SchoolJames R. Hargrove is a practicing attorney and legal educator with a Juris Doctor from Yale Law School and an LLM in Constitutional Law. With over a decade of experience coaching bar exam candidates across multiple jurisdictions, he specializes in MBE strategy, state-specific essay preparation, and multistate performance test techniques.