How to sell your annuity: the ultimate guide


Over 30,000 recipients get structured settlement payment stotalling billions of dollars per year. These payments are typically tax-free, and the income has no bearing on a person’s ability to receive Medicaid or Social Security disability benefits, for example.

However, recipients may think about completely cashing in their structured settlement by selling the future value of it if an emergency arises or a large sum of money is required. Find out below how to sell your structured settlement.

Seek legal counsel

It is always recommended to ask legal and financial counsel: “Can I sell my structured settlement?” Have a discussion with them for your reasons for wanting to sell all or a portion of your settlement so that they advise you accordingly.

What is your reason for selling?

Every structured settlement sale must be reviewed and approved by a court; this is required by law. A judge will want to ensure the sale of your future payments is in your best interest and will not hurt your future well-being. Therefore, you need a valid reason to sell your settlement. It could be a financial emergency like a medical crisis, education, property payment, etc. Judges also consider the history of the buying corporation, the amount you are receiving, and all other factors surrounding the deal.

Identify the best-structured settlement company

Sell your structured settlement, or portions of it, in the same way you would another high value item – meaning ensure you are completely comfortable with the process, buyer and are getting the best deal. Compare prices. You may get a better deal if you don’t go with the first firm that offers you a quote. Compare quotes and choose the buyer who offers you the greatest value while also exhibiting credibility, professionalism, and openness. Don’t forget to account for the lump sum payment amount and any possible fees.

Do the paperwork

You must submit some documentation to start the process and work through the court dealings. The paperwork will be supplied to you by the appropriate parties.

Wait for court approval

Selling a structured settlement requires the judge’s assessment and approval before completing the transaction. Be prepared to wait more than a month before speaking with a judge to get their approval or denial on the intended transfer of your future structured settlement payments.

Finalize the agreement

You’ll get your money once the judge accepts the sale deal. Finalize your transfer agreement and get your funds so you can carry out your goals and move forward in your life.

A key takeaway

Cashing out a structured settlement by selling the future payments can be wise if you need to access a size able sum of money for an urgent need, a substantial life expense like a home purchase, or college expenses. However, carefully consider the consequences before making such a huge choice because you will get less from the lump sum then you would from the future payments. Get offers from at least two to three separate purchasers before proceeding with a transaction to be sure you’re getting the best deal.

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