Structured settlements, annuities, lottery prizes, legal settlements and equipment leases all pay money over time, and each of those payment streams can be sold for a lump sum today. We buy some of them and shop the rest to competing buyers, and we also arrange inheritance advances. Every offer shows the discount rate and the math, and keeping your payments is always an acceptable answer.
This guide explains what each stream is, who stands behind it, what has to approve a sale, and how every one of them gets priced, so that you can read any offer, ours included.
What a payment stream is
A payment stream is a right to receive a series of payments, owed by someone else: an insurance company, a state lottery, a business or an estate. You can collect each payment as it arrives, or sell some or all of them to a buyer who pays you now and collects them later.
The buyer pays less than the total of the payments. The gap is called the discount, and it exists because the buyer is tying up money for years and taking some risk that a payment does not arrive. What changes from one stream to the next is how much risk there is, who has to sign off on a sale, and how long that takes.
The six streams at a glance
| Stream | What it is | Who pays | What has to approve a sale |
|---|---|---|---|
| Structured settlement payments | A lawsuit payout spread over time, funded by an annuity | A life insurance company | A judge, under your state’s transfer act |
| Annuity payments | Income from an annuity contract | An insurance company | The contract and the insurer, plus a court for a settlement annuity |
| Lottery payments | A prize taken as yearly installments | A state lottery | State law, usually through a court order |
| Legal settlement payments | A settlement paid in installments | The defendant or its insurer | The settlement terms, and a court in some cases |
| Inheritance advances | Cash now against your share of an estate in probate | The estate, out of your share, when it distributes | An assignment the executor will honor |
| Equipment lease payments | Monthly rent on leased equipment | The business using the equipment | The lease terms on assignment |
Paid by insurers and lotteries
A structured settlement pays out an injury claim over time. A life insurer funds the payments, so the risk of non-payment is low, but nearly every state requires a judge to approve a sale. Start with selling structured settlement payments if that is what you receive.
A personal annuity you bought yourself is different. You own the contract, so the insurer’s own options come first, and a sale is only possible if the contract allows assignment. Selling annuity payments covers both kinds.
Lottery prizes taken as an annuity are paid by the state, and the state sets whether and how much you can sell. Selling lottery payments explains the rules and the court step.
Paid by defendants, estates and businesses
Some legal settlements are paid in installments by a defendant or its insurer without a formal structured settlement behind them. The price then depends heavily on who is paying, because a small business is a weaker payer than a large insurer. See selling legal settlement payments.
An inheritance advance is not a sale of payments at all. You assign part of your expected share of an estate to a funder, who pays you less now and is repaid by the executor when probate closes. Inheritance advances sets out how the pricing works and when an advance is a poor deal.
An equipment lease is paid by the business using the equipment. A lessor who sells the remaining payments is relying on that business’s credit and on what the equipment would fetch if the payments stopped. Selling equipment lease payments covers what funders check.
How every stream is priced
A buyer chooses a discount rate: the yearly return it wants for waiting and for the risk it is taking. It uses that rate to convert each future payment into its value today, called its present value, and adds them up. That total, less any costs, is roughly the most the buyer will pay.
A small example. Say you are owed $500 a month for 60 more months, $30,000 in all. At a 9% discount rate, the present value of those payments is $24,087. At 12%, it is $22,478. Three points of rate cost you $1,609 on a five-year stream, and much more on a longer one, because payments far in the future lose more value at every step.
Illustrative example. Monthly discounting, before legal and closing costs.
The method is the same one note buyers use, and how note buyers calculate a price, yield and discount walks through it step by step. Inheritance advances are the exception, since they are priced as a fixed fee against an uncertain date.
Our fee is paid on the buyer side and built into each offer, so what you see is the rate and the net cash.
How these differ from private notes
A private note is paid by a person or a business, usually someone who bought a property or a company from the note holder, and it is backed by collateral such as a house. Buyers of notes spend most of their time on the payer’s record and on that collateral. Buyers of insurer-backed or lottery payments spend most of their time on the legal steps, because the payer is rarely the risk.
So discount rates on insurer and lottery streams are often lower than on private notes, and the sale closes through a court order or a change of payee, not through title or escrow. If what you hold is a note from selling a property or a business, start with the types of notes you can sell instead.
Selling only part
You rarely have to sell the whole stream. The common choices are the next few years of payments, a single future lump sum, a fixed dollar amount from each payment, or a block of later years. Selling less means a smaller discount in dollars and keeps more of your future income. Private note holders use the same idea, called a partial purchase.
How to compare offers
Ask every buyer for three things in writing: exactly which payments are being bought, the discount rate, and the net cash after every cost. Our checklist on how to compare offers on your note uses note examples, and it applies to any payment stream.
Be cautious with repeated calls, cash advances offered before a court rules, and anyone who says a required hearing can be skipped. A fair offer will still be fair next week.
When keeping the payments is the better answer
Selling turns guaranteed future income into less money now. If the payments cover your basic bills, if a cheaper option such as a penalty-free withdrawal or a small loan would meet the need, or if the numbers only work at a rate well above what other buyers quote, keep the payments. We would rather tell you that than close a sale you regret.
If you want to see the numbers on yours, ask for a quote with the schedule of payments and who sends them. You will see each offer and the rate behind it, and you are free to say no.
Guides in this section
- Selling Part of a Structured Settlement
- Sell Structured Settlement Payments
- Sell Annuity Payments
- Sell Lottery Payments
- Sell Legal Settlement Payments
- Inheritance Advances
- Sell Equipment Lease Payments
Related questions
Which payment streams can be sold?
Structured settlement, annuity, lottery, legal settlement and equipment lease payments can all be sold, subject to the rules that govern each one. Inheritance advances work differently: you assign part of your expected share of an estate rather than selling a stream of payments.
Why will a buyer pay less than the total of my payments?
Because the buyer waits years to collect and takes some risk that a payment does not arrive. It sets a discount rate and converts each payment into its value today. The total of those values, less costs, is the offer.
Do I need court approval to sell?
For structured settlements, yes, in nearly every state. Lottery sales usually need a court order too. Annuities, legal settlements and equipment leases depend on the contract and the payer, and we tell you what applies once we see the paperwork.
Can I sell only part of my payments?
Usually. The next few years, a single future lump sum or part of each payment are common choices. Selling less keeps more of your future income and costs less in discount.
Do you buy these payments or broker them?
Both. We buy some with our own or partner capital and shop the rest to competing buyers. Either way, every offer shows the discount rate and the net cash, with our fee paid on the buyer side and built into the price.