Structured settlements and annuities can be confusing and complex. While selling both annuities and structured settlements is regulated under state and federal law, there can be a great deal of confusion throughout the process. Settlements.org is committed to ensuring you have the smoothest possible transaction, and that you’re never left in the dark about important questions and information during the process. We’ve developed a list of the most frequently asked questions, and you can find the information below. We hope this helps to answer many of your own questions.
Why would someone sell their payments?
There are numerous potential reasons for selling the payments of a structured settlement or annuity. For many people, it comes down to paying off medical bills. However, you can do it for any reason, including buying a home, buying a new car, putting your child through school and more. Other reasons might include a death in the family, or a significant life transition (divorce, for instance). Selling your payments can be an invaluable solution when other lending options either can’t or won’t provide relief.
Is it legal to sell my structured settlement?
Yes, selling your structured settlement is completely legal and legitimate. You have the right to sell all or part of your payments, and that right is protected by both state and federal law. You can even sell your structured settlement if the language of the contract prohibits the sale of future payments.
Am I required to sell all of my future payments?
You are not required to sell any specific number of payments. You can sell all of the payments coming to you if you prefer, but you can also sell only enough to give you the amount of cash necessary. In fact, most of the time we don’t advise selling all of your payments. Most experts agree that selling only enough to cover your immediate financial need is the best route, as it leaves the majority of your future income intact.We can assist you in selling portions of each payment, in bundles of 8, 10, 15 or more years at a time. It’s also possible to sell a combination present and future payments if you prefer. Each case is different, and we’ll build the ideal solution for your specific,individual needs.
Is there a minimum number of payments required?
There are exceptions to every situation but we generally require $20,000 per transaction. Our average transaction is actually much higher, between $35,000 and $40,000. Again, each situation is different, though, and exceptions do occur.
Do I really have to go to court?
Yes, you do have to go to court. It’s required by law. The only way to sell your payments is for a judge to approve it, and to do that, you have to go to court. You’ll appear before the judge, answer his or her questions, and then he or she will determine if the sale can proceed. You will have legal representation, but you’ll have a greater chance of being approved if you can explain your situation to the judge yourself.
How long do I have to wait?
The entire length of the process varies. However, it should take no longer than 60 days,and might take as little as 45 days to complete. A great deal depends on where you’re located and how quickly you can supply the information necessary to start the process.Of course, state-specific waiting periods also play a role here.
How do you determine how much money I’ll see from the sale?
The amount you see from the sale is actually calculated with a financial program that considers a range of factors, including the insurance company’s rating, the duration of payments, the amount you’re selling, and the amount you need. The program will calculate a discount rate, and we utilize that to apply to your future payments. The discount rate is similar to the APR on a conventional loan, and it can vary greatly by individual cases.
Will my lump sum be less than the total amount of the payments I’m selling?
This is perhaps the most important question to answer. In order to answer, you must understand the time value of money. Over time, the value of money declines. A dollar will not be worth as much in 10 years as it is today, just as a dollar today is not worth what it was 10 years ago. Because of this, your lump sum will always be less than the dollar amount of the payments you sell. The difference is indicative of what the amount you’re selling today will be worth in the future.
Can I sell a single-premium annuity that wasn’t part of a structured settlement?
If you purchased an annuity on your own that wasn’t part of a structured settlement, you can sell the payments. You will also benefit from a faster process, as court approval is not necessary for these sales.
Is my lump sum payment taxed?
Annuities and structured settlements are tax-free financial tools, which means that your lump sum is also tax-free. You will not be taxed on that amount.For any other questions, please contact us.