You will not get full price
You need to go into this process with a clear understanding that this is a business deal. Companies that buy structured settlements intend to profit from their purchases. For you, this means if your annuity is worth $250,000, you’ll be offered less than that in a cash payout.
How much less?
It could be as low as 50 percent. In many cases, the offer will come in at 60 percent to 80 percent of the original value. Percentages are based on market conditions, particularly institutional interest rates set by the Federal Reserve, and conditions constantly change. In effect, the discounted purchase amount is the price you are paying for the ability to tap into immediate money.
Not surprisingly, the rate at which you discount your future payments is called a discount rate. This is a percentage based on projected future interest earnings, and is a rate you as the seller can set. The average discount rate is 12%. Discount rates are influenced by the total amount of payments you are selling, how many payments you are selling and the date those payments will arrive.