You’ve got payments from an annuity that come in on a schedule, and you’re wondering if you can cash them out to cover an expense. But can you even sell an annuity?
Sometimes. Not every annuitant can transfer the rights to their future annuity payments for a lump sum of cash. The word "annuity" is a broad term that refers to investments and financial products from insurance companies that pay out a fixed stream of payments according to a specific schedule. A structured settlement is a type of annuity that is assigned by a court as a result of a claim or lawsuit. To sell your future payments with CrowFly, they need to come from a structured settlement*. You can check your policy to confirm that the asset you have is a structured settlement and not a different type of annuity or settlement. If you need assistance figuring it out, our team can help you review your policy (and don’t worry; there are no obligations when you call us, and everything is kept confidential).
So, who can sell an annuity? To qualify, you must have future payments from a settlement as described in 26 U.S. Code § 5891. Structured settlement factoring transactions (here comes the legal jargon):
The term “structured settlement” means an arrangement which is established by:
(i) suit or agreement for the periodic payment of damages excludable from the gross income of the recipient under section 104(a)(2), or
(ii) agreement for the periodic payment of compensation under any workers’ compensation law excludable from the gross income of the recipient under section 104(a)(1), and under which the periodic payments are (i) of the character described in subparagraphs (A) and (B) of section 130(c)(2), and
(iIi) payable by a person who is a party to the suit or agreement or to the workers’ compensation claim or by a person who has assumed the liability for such periodic payments under a qualified assignment in accordance with section 130.
If your future payments are in fact from a structured settlement — and you decide that you need to sell them in exchange for a lump sum of cash — a court order must first authorize the sale in your state. In a nutshell, the court will look into whether selling your settlement would violate another court order or any other law, and that it is in your best interest and the best interest of your dependents to sell.
We know you're probably still looking into your options. It might be helpful to use our free, no-hassle structured settlement calculator on our homepage to estimate how much you can expect to receive for your future payments. We do not ask for your contact info to use this tool. We also have a free ebook for structured settlement sellers that you can download to learn more about selling. And if you want to talk with a real person about the possibility of selling your structured settlement payments, get started, or give us a call at 833-CROWFLY.
*CrowFly also works with self-owned annuities on a case-by-case basis.