Written By : Alanna Ritchie

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The Process for Selling Annuity Payments

The selling process for annuities or structured settlements is simple. But before you make the decision to sell, you must first decide if you truly need your money now.

Once you make that decision, you can have a free quote in hand in only a few minutes, and within 90 days you can have money in your bank account or a check in your pocket.

The typical process for selling an annuity or structured settlement can be summed up in these six easy steps:
  • Contact a purchasing company for a free quote. Our experienced customer representatives can also help you obtain a quote.
  • Evaluate your offer, compare it to others, and accept a contract offer.
  • Get your cash advance to help pay for your living expenses while awaiting a court date.
  • Go to court, where a judge will review your case.
  • Send a copy of the approved transaction order to the insurance company.
  • You receive full payment.

Should I Sell My Structured Settlement Payments?

If you are reading this page, chances are you’re already considering selling all or part of your structured settlement. That’s good. You’re doing your homework.

Now is the time to determine if this is the best decision for you and your family. Start by reading through your annuity or structured settlement contract, or even sitting down with your attorney or accountant to review the details. You should know and understand that document thoroughly before getting started.

Then ask yourself some tough questions, and answer them honestly:
  • Do you absolutely need cash right now?
  • Is the reason you need money valid? Are you spending on a “want” or a “need”?
  • Is this the best possible way you can raise the money you need?
  • Will the sale of rights to your future payments jeopardize your financial security?
  • What type of sale works best for you — full, partial, split or reverse?

If you think these questions are hard, get used to them. These questions – among others – are ones you’ll have to answer if you decide to make this quick journey. Until you can come up with the right answers, you shouldn’t proceed.

The answers that lead to a decision to sell typically involve long-term, personal investments including:
  • Purchasing a new home
  • Providing for a new baby
  • Investing in continued education
  • Investing in a new business venture
  • Paying off debt

Getting Your Free, No-Obligation Quote

After making the decision to sell, it’s important to shop around for the best quote. Do your research to find a trustworthy seller that can provide you with the best service and the best deal. Take the time to ask for advice or recommendations from lawyers or accountants. Do all that you can to find a buyer that’s reputable and has a proven track record of success.

You can also call us to find out how much your structured settlement or annuity is worth. We can recommend trustworthy factoring companies to work with, including our partners.

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Various federal and state laws will regulate the transfer procedure and protect your rights throughout.

For example, many companies are legally required to disclose to you in writing all the details related to the sale, like:
  • How many months of your settlement rights you’re selling
  • The amount of money you’ll receive
  • The difference between the value of your settlement payments if the annuity contract were to be maintained vs. their value if sold
Juliette Fairley explains why you don't receive the full value of your annuity when you sell it.

Putting Everything in Writing

Make sure you have records of your transaction in writing. As you work through the money you’ll receive for your sale, you’ll have to supply documentation to verify your annuity, including the settlement contract between you and the insurance company that issued your annuity.

You’ll also have to convince the buyer that you’re making the right decision to sell and that you understand you’ll be selling your payment rights at a discounted rate. The lower the discount rate, the more you, the seller, will benefit. The higher the discount rate, the more the buyer will benefit. Discount rates can be negotiated, but most buying companies have a rate they typically abide by when purchasing. The average discount rate is roughly 12 percent.

Each state has its own regulations according to the Structured Settlement Protection Act. In your case, that means you’ll have an obligation either to have access to an attorney or to seek outside professional advice before entering into a signed agreement.

Once you accept your cash offer, the buyer will send you necessary transfer documents to sign and have notarized. The sooner you return the documents, the sooner the legal process begins.

Getting Cash While Waiting for a Judge’s Approval

Once you return signed documents, a local attorney – one you hire or one the factoring company hires to assist you – files them with the court to schedule a hearing. Waiting for a court date could take up to 60 days after filing all signed documents, but it greatly depends on where you live and what is already on the court docket in your area. Your factoring company may be able to help you during this time by providing an up-front cash advance. While not all annuitants need immediate access to cash during the selling process, financial needs can change over time.

Other elements of the selling process are also impacted by where you live because your state may have laws on selling annuities. Some states require sellers to receive a professional assessment of the sale by a third party, while others allow for a “cooling period” in which you can change your mind about the sale. You may want to check with your lawyer or financial advisor about the unique laws in your state before pursuing the sale.

Going to Court

When you finally receive a hearing date to approve your annuity sale, you’ll find yourself standing with your attorney in front of a judge. Be prepared to explain the need for your money and to show that you are not putting yourself or your family in financial jeopardy. The judge will take your reasoning into account when evaluating the case, as well as other factors such as the reputation of the purchasing company, the discount rate, your employment status and any previous transactions on the annuity.

If the court accepts the transfer, the issuing company will receive the transfer order for acknowledgement. Your annuity purchaser will then send you a lump-sum payment.

Amendment Sales

What happens if you still need money after you sell your payments? If you haven’t sold all of them, you have a right to sell the rest – or only a portion of the rest. The process for these amendment sales is the same from start to finish.

Last Modified: November 26, 2019