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Structured Settlement Annuity Lump Sum Calculator

Calculate the present value lump sum cash buyout offer for structured settlement annuity payments, factoring company discount rates (7%–12%), and forfeited future cash.

Calculated Results

Estimated Lump Sum Cash Offer (Present Value)
$244,050.00
You forfeit $205,950.00 in future payments to receive cash now
Total Future Payments Value
$450,000.00 (180 months)
Discount Rate Haircut
$203,450.00 (45.2%)
Net Dollar on the Dollar
$0.54 per $1.00 Future Cash
Court Approval Required
Yes (State Structured Protection Act)
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Frequently Asked Questions

How does a structured settlement buyout factoring transaction work?

If you hold a structured settlement annuity paying monthly sums and need immediate cash, factoring companies purchase your future payments at a discount rate (typically 8% to 14%), paying you a discounted lump sum.

Why does selling a structured settlement require court approval?

Under federal law and State Structured Settlement Protection Acts, a transfer is legally invalid until approved by a state judge, who must formally determine that selling is in the payee's best financial interest and necessary for urgent hardship.

What is a fair discount rate when selling annuity payments?

Legitimate institutional factoring rates typically range between 7% and 10%. Beware of predatory companies quoting discount rates above 14% to 18%, which can strip more than 60% of your annuity's value.

Are proceeds from selling a structured settlement taxable?

If the underlying structured settlement originated from a physical personal injury claim (tax-free under IRC Section 104(a)(2)), the lump sum buyout retains that tax-free status.