Frequently Asked Questions about Selling Your Structured Settlement
Oasis will buy your insurance settlement payments! The process is easy, well established and quick. We will answer all of your questions!
Feel free to call us and talk to a live representative, or read the answers to the most common questions below.
What are Structured Settlements?
Many times when individuals are in involved in accidents or wrongful death settlements with insurance companies they elect to receive a series of payments over a longer period of time instead of an immediate lump sum. These payments normally total more than the amount one would have received at settlement. In order to make this election, the Plaintiff must sign a Settlement and Release Agreement that allows the Defendant to purchase an annuity policy to provide for the payments to the Annuitant. The Annuitant does not own the annuity and does not have the right to sell the annuity. He does have the right to receive the payments and can sell them to a third party.
As an example... John, an electrician working on the construction site of a new office building, is involved in a terrible accident in which his hand is crushed. After the emergency trip to the hospital and several surgeries, the doctors determine that he won’t regain full use of his hand. Without the full use of his hands he can’t be an electrician. Since John’s wife works, he’s not in need of financial help to pay his bills. However, because his workplace injury he has been left unable to continue in his career. He files a worker’s compensation suit, and wins a large amount of money, $360,000. However, instead of giving John the money all at once, it is agreed that he will be awarded a structured settlement; which pays John $3,000 a month for the next ten years. This is so John can maintain some income (since he can’t earn a paycheck as an electrician) while he learns new skills for a different line of work. However, two years after receiving his Structured Settlement, John needs to buy a work truck for a new business he started, but doesn't have the cash on hand. So John decides to sell some of his Structured Settlement payments to buy the truck.
Why would anyone want to sell his or her structured annuity payments?
If someone needs money from their settlement payments, it is usually because they have a financial emergency or they have near-term expenses that their current income won’t cover. For example, they may need to make significant home improvements, or maybe they want to buy a home and need the money for a downpayment, or perhaps they want to start a business, or pay for schooling. There could be any number of valid reasons, but it is also important to note that the transaction, selling a structured settlement annuity payment, must be approved by the judge so the reason must be legitimate. Liquidating a portion of their settlement payments is sometimes the only solution to critical problems.
How much will I receive?
The amount paid for a structured settlement is influenced by three primary factors:
- the amount and timing of the payments that the buyer will receive, as they relate to the value of money,
- the probability that the issuer, usually an insurance company, will make the payment on time and in the full amount,
- the current economic conditions such as interest rates effecting the cost of money.
Without getting into too many financial terms, and all other factors being equal, the sooner the future annuity payments will be received (2 years versus 10 years), then generally the higher the purchase price for your structured settlement.
How Quickly Can I Get My Money?
After you’ve signed the contract, on average it takes about 45 days to receive your money. However, keep in mind that every structured settlement purchase transaction is different due to each state’s laws regulating such purchase transactions.
What if I want to sell only a portion of my payments?
You can! More often than not, owners of structured settlements sell only a portion of their annuity payments to meet their specific financial need at the time. It is also common for owners of structured settlements to sell a different portion of their annuity payments on several occasions over their lifetime as the need arises. Oasis can structure a plan to buy a portion of each payment, buy one payment, several payments, or offer a lump sum payment for the entire structured settlement annuity. Each transaction can be tailored to your needs. This will allow you to plan your financial needs and retain part of your cash flow for your ongoing expenses.
What will it cost me?
There are no up front costs to sell your structured settlement. However, to be clear there are fees involved, but those are subtracted from the final amount you will receive. Having said that, when you receive a quote from a company to purchase your structured settlement, make sure all of the fees are already taken out of that final number quoted to you – that the number you’re quoted is the amount you’ll receive!
The quote you’ll receive from Oasis, or one of our partner companies, does include all of the fees associated with the transaction. Bottom line is the number quoted is the amount you’ll receive!
Will I owe taxes on this money?
On June 10, 1999, the IRS issued a Private Letter Ruling 119273-97, which confirmed that an individual’s sale of structured settlement payments would not create a taxable transaction. In addition, HR 2884 confirms this ruling. We do encourage you to contact your accountant just as a safeguard.
How Much Are My Payments Worth / How Large Of A Lump Sum Payment Can I Get?
As mentioned above, there are several factors used to determine how much your structured settlement payments are worth. We can provide you with a Free Quote based on your payment schedule from the insurance company who sends your structured settlement annuity payments to you, how many of your payments you want to sell, and when those annuity payments are scheduled to be made.
Can this be done on worker’s compensation settlements?
Unfortunately, no. Only personal injury lawsuits where a structured settlement was awarded, qualifies under IRC 104(a)(2) can be transferred under the federal and state transfer acts.
Who is Oasis and what do they do?
To read about Oasis Legal Finance, LLC, and what all we do, read our company overview
What about courts that have held anti-assignment language as enforceable?
Even in states where the courts have upheld anti-assignment language, judges often rule that a transfer of payments is in the best interest of the annuitant notwithstanding such previous rulings.
Will I Be Protected?
Yes. As of now, 40 states have passed legislation that provides for the sale of structured settlement annuity payments. These state laws work with existing federal laws which spell out clear rules for the sale of periodic payments for a lump sum of cash. Court orders are issued ensuring the best interest of the client.