To help combat the predatory purchasing of structured settlements, Settlement Advocates of America offers free services to judges and lawyers giving them a better picture of what an annuitant should be getting when they have to factor a structured settlement payment stream.
An example below shows how the same discount rate and aggregate payments are affected by time.
120 current monthly payments of $1,000 transferred (purchased) at 9.9% would be worth roughly $77,500 to the annuitant. At the sell rate to the factoring company of 4.5% (even lower for the larger companies) the factoring company would receive roughly $96,500 for these payments making the factoring company $19,000 profit off the transaction.
Using the same rates and payments above, but purchasing payments starting 10 years out, the example below shows the difference of time and its effect on what the annuitant gets, and how much the factoring company gets.
120 monthly payments that start 10 years from now of $1,000 transferred (purchased) at 9.9% would be worth roughly $30,000 to the annuitant. At the sell rate to the factoring company of 4.5% (even lower for the larger companies) the factoring company would receive roughly $62,500 for these payments making the factoring company $32,500 profit off the transaction.