What percentage do structured settlement companies take

If you own a structured settlement annuity and thinking of selling your payments, you might be wondering what percentage do structured settlement companies take?

Before we get to that, since you're reading this page, it's important to ask:

  • Is the cash absolutely necessary right now?
  • Is there another way to raise the cash you need?
  • Will selling your settlement payments drastically affect your future income stream?
You might be thinking "it's my money and I need it now", and we understand. We just want to make certain this is the right decision for your current situation.

It's important to know up front, you will not get face value. No matter where you go to try and sell your structured settlement.

This is because the structured settlement companies and broker fees, which are included within a buyout, are the percentage that settlement companies take.

The lump sum you'll receive from cashing out your payments includes a discount rate that is determined by a variety of factors, from payment frequency, the company rating behind the annuity and total amount of the settlement, to other considerations like market conditions, how long the payments are scheduled for, impact of inflation changes, along with the inflation on payments and more.

Structured settlement and funding companies create a discount rate based on these factors to determine a buyout rate and the present value.

The best way to explain why you would not receive full value of your payments is to realize that inflation affect the value future of future payments. In other words, what a dollar buys today will not have the same worth as in the future. A quick example of that is to think about purchasing a home. In the 70's you could get a fine home for under 100K, in the 80's the same home might be closer to 200K, and today it would be over 500K for something comparable.

It's also important you are aware that you are not required to sell your entire structured settlement and have the option to sell a portion of the payments. Be sure to try our calculator to help determine the approximate value.

We strive to make sure our customers are completely aware of their options when it comes to understanding percentages, current value, and what your structured settlement is worth. We encourage you to continue reading the articles here in order to properly educate yourself about your options before making any decisions.

As a reference, this chart might also help to see how inflation and the time value of money can affect your buyout offer:

Recommended reading:

How Much Is My Structured Settlement Worth?
Guide to Structured Settlements
Considerations When Selling Structured Settlements

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