You receive settlement payments from an insurer and want some of that money now. We put your payments in front of competing buyers, show the discount rate behind every offer, and tell you plainly when keeping them is the better call.
Four ways sellers end up with less than their payments are worth.
Every offer comes with the rate and the math.
| Monthly payment | $1,000 |
|---|---|
| Payments left | 120 |
| Total of payments | $120,000 |
| Buyer's discount rate | 10.0% |
| Lump sum before costs | $75,671 |
| Discount from total | 36.9% |
| Our fee | built into the price |
| Sell all 120 payments | Sell the next 60 | Keep them | |
|---|---|---|---|
| Cash today | $75,671 | $47,065 | $0 |
| Payments still coming to you | None | 60 payments of $1,000 | 120 payments of $1,000 |
| Total you receive | $75,671 | $107,065 | $120,000 |
| What you give up | Every future payment | The next five years | A lump sum now |
Illustrative example: $1,000 a month at a 10% discount rate, before court and legal costs. Totals add up the payments as scheduled and are not adjusted for the value of money over time.
The settlement agreementThe annuity contract or benefits letterA recent payment statementAny earlier transfer ordersA structured settlement pays out a legal claim, usually a personal injury or wrongful death case, over time instead of in one check. The defendant or its insurer buys an annuity from a life insurance company, and that insurer sends you payments on a fixed schedule: a set amount each month, sometimes with larger lump sums on set dates. You are the payee. You receive the money, but you do not own the annuity contract, and that is one reason a sale has to go through a judge.
What you sell is the right to some or all of those future payments. The buyer pays you a lump sum now. Once the court approves the transfer, the insurer sends the payments you sold to the buyer instead of to you, and keeps sending you any you did not sell. For the wider picture, read how this market works.
The payee named in the settlement can sell, as long as the payments come from a structured settlement and the law of the relevant state allows a transfer. A few situations need more care:
Nearly every state has a structured settlement protection act. Federal tax law adds an excise tax on the buyer equal to 40% of its discount if a transfer goes ahead without a qualifying court order. In practice that means no court approval, no sale. The details differ from state to state, but the steps usually look like this:
Judges do turn transfers down, most often when the price looks poor or the reason for selling is thin. Anyone who says you can skip the hearing is not describing a lawful transfer.
Most of the time goes to the court calendar, not to pricing. Preparing the petition and waiting for a hearing date commonly takes weeks to a few months, depending on the state and county. We cannot promise a date, but we can tell you where your file stands at each step.
Be careful with any company that offers you a cash advance before the judge rules. That money usually comes with terms that make it hard to change your mind or take a better offer.
Keep your payments if they are your main income, if the need is small enough that a short-term loan or a payment plan would cover it, or if the only offer you hold works out to a discount rate well above what other buyers quote.
If you do sell, sell only what covers the need. Selling the next few years, or a single future lump sum, leaves the rest of the schedule paying you. Judge every offer on its discount rate and net cash, as set out in how to compare offers, and see how settlement payments sit beside the other payment streams we buy and broker.
Yes, in nearly every state. State transfer acts require a court order, and federal tax law makes a transfer without one very costly for the buyer. A judge looks at whether the sale is in your best interest, including the needs of any dependents.
Usually. You can sell the next few years, a single future lump sum, or part of each payment, and keep the rest. Selling only what covers the need costs less in discount and keeps more of your income.
The buyer picks a discount rate, the yearly return it wants, and converts each payment you sell into its value today. The total, less costs, is the offer. Every offer from us shows that rate, so you can compare it with any other quote.
Then the payments keep coming to you as before. Judges decline transfers most often when the price looks poor or the reason is thin, which is a protection worth having.
Payments for a physical injury are generally tax-free, and the lump sum often is too, but it depends on your case. Ask a tax adviser before the hearing.