How-To Guide: Selling My Structured Settlements

Tara Mastroeni
Published: February 15, 2020 | Updated: December 09, 2021

saving for retirement using annuity

Life does not always play out as expected. Perhaps it’s a medical emergency, or maybe you’ve recently lost a job. Whatever the case may be, you need cash immediately.

Selling annuity payments is one way to get immediate access to this cash. Annuity owners have the ability to sell either all or a portion of their annuity payments.

In this article, we’ll go through topics, such as what selling an annuity entails, why someone would want to sell their structured settlements, various options for selling structured settlements, and more.

Why Should I Sell My Annuity Payments?

What are the reasons for selling annuity payments? The specific answer can vary from person to person, but it essentially boils down to requiring access to cash. Some example situations include:

  • Job loss
  • Medical bills
  • Car repairs
  • Home repairs
  • Paying off student loan
  • Wedding expense
  • House down payment
  • Funeral costs

Whatever your life circumstance may be, cashing out on your annuity payments for a serious need may be necessary. There are extra transactional, interest, and withdrawal fees when you sell annuity payments, however, so ensure the cash is indeed truly needed.

What Are My Options for Selling My Payments?

There are three main options to consider if you are looking to sell annuity payment proceeds:


By selling the entirety of your annuity, you’ll receive the full lump-sum amount of cash in return. With this option, you forfeit any future income payments as outlined in your annuity contract.


Selling a portion of your payments allows you to receive a partial lump-sum amount. For example, if you sell the first two years of your annuity payments, you’ll receive a lump-sum equivalent. You won’t receive payments in your first two years of the annuity contract but payments will resume after the two years are over.

Lump Sum

Similar to the partial buyout, an annuity owner can sell a certain amount to a buyer. Based on that amount, the annuity owner will not receive payments for a period of time. Lump sum differs from partial in that it allows the owner to be more specific in the amount of cash received from selling annuity payments.

family selling annuity

How Much Will I Receive for Selling Annuity Payments?

The amount you receive for selling annuity payments will vary from each company. The general rule, however, is you’ll receive less than the actual value of your annuity. This is due to the various withdrawal, interest, and transactional fees involved with selling annuity payments.

Typically the earlier you withdraw from your annuity, the higher the interest rate you pay. This is where shopping around or negotiating for the best rates comes in when looking to sell your structured payments.

Who Will Buy My Annuity?

So you’ve decided that selling your annuity is the right course of action to take. The next question is, who will actually buy a structured settlement or annuity?

Many types of entities will purchase annuities as a long term investment. They range from private investment funds to financial institutions to factoring companies. These cash flow investors will buy your annuity in exchange for a lump sum payment. 

Alternatively, you may also find  an individual or “mom and pop” investor that will purchase your asset as using a retirement account or cash in the bank. These individual investors are not as easy to find in a Google search. Self-directed IRA companies are a good place to look for mom and pop investors if that is the route you want to take.

How to Sell Structured Settlement Payments

How do you sell your structured settlement payments? Selling your payments is not an overly difficult process. Refer to the following steps below to begin selling your structured settlement payments.

1. Determine which selling option (i.e. entirety, partial, lump-sum) is most suitable for your circumstances.

2. Contact an annuity buyer and get a quote. Shop around to get the best rates and conditions.

3. Prepare all paperwork and set a court date. Selling structured settlement payments require approval from a judge as well as complying with all state and federal regulations.

4. Once approved by the judge, you’ll gain access to the cash.

Can All Annuities Be Sold?

Not all annuities can be sold. The law limits certain annuity payments from being sold, including:

  • Worker’s compensation
  • Divorce settlement
  • Child care support
  • Annuity residing within tax-qualified retirement plans, such as 401(k)
  • Veterans’ benefits
  • Social security benefits

Besides the list above, most other annuities can generally be sold. If in doubt, it’s always a good idea to discuss further with your lawyer or accountant.

How Long Does It Take to Receive Funds?

The amount of time it takes to receive your funds depends on a few factors, such as the court approval times, factoring companies’ processing times, and various state laws.

On the low end, it could take about 40 days to complete. However, it can take as long as 90 days to get access to your funds.

Some companies offer cash advances that can expedite the process once court approval is obtained. In this case, you can receive your funds in just a few days after the transfer is approved.


Whether it’s a job loss or an unexpected expense, you may require immediate access to cash. Selling your annuity payments can be a strategy that will get you that access.