The Types of Payment Streams You Can Buy

A secondary market annuity is a schedule of payments, and those schedules come in several shapes. Some pay monthly, some annually, some as a single future lump sum. Some stay level, and some step up a little every year. Knowing the structures makes it far easier to match a stream to the income you actually want, so here is a plain guide, plus an explanation of why some payment amounts look unusual.

How often the payments arrive

The first thing that varies is frequency. On our inventory you will see streams that pay:

• Monthly, the most common structure, useful when you want income that mirrors regular expenses.
• Quarterly or semi-annual, fewer, larger deposits across the year.
• Annual, a single payment once a year.
• Lump sum, one or more larger payments due on set future dates rather than a recurring schedule.

None is better in the abstract. A monthly stream suits recurring cash needs; an annual or lump-sum stream can suit a known future obligation, like a tuition bill or a date you plan to retire.

Level payments versus annual increases

The second thing that varies is whether the payment stays the same or grows. Many structured settlements were written with built-in annual increases, so you will see:

• Level payments, the same amount every period for the life of the stream.
• Payments with annual increases, where the amount steps up by a set percentage each year. You will see this on both monthly schedules (monthly payments that rise once a year) and annual schedules (annual payments that rise each year).

An increasing stream helps income keep pace over a long horizon, and it usually reads as a slightly different yield and price than a level stream of similar size. The full schedule, with every amount and date, is shown on each listing so you can see exactly how it grows.

Future lump sums

Some streams are not a recurring schedule at all but one or more lump sums due on specific future dates. These can be a clean fit when you are investing against a known future need rather than for ongoing income, and because you buy them at a discount to the future amount, the gap is your yield.

Why some payment amounts look odd

You will sometimes see a stream marketed in an unusual amount, something like $1,438.72 a month rather than a round number. That is usually because the original payee is selling only a portion of their original annuity, not the whole thing. The odd figure is that portion of the underlying payment.

When a payment is split this way, the insurance carrier handles it one of two ways. Most carriers will agree to split the payment directly, sending your share to you and the remainder to the original payee. If a particular carrier will not split payments internally, a third-party servicer receives the full payment from the carrier and divides it among the parties.

What a servicer does, and why it can help you

A servicer is a neutral intermediary that collects the carrier's payment and distributes each party's share. Beyond making a split possible, a servicer can be a genuine advantage for an investor: because the servicer already administers the split, it is typically easier to re-assign or resell the payment stream to a new buyer in the future. That matters, because while these are long-term holdings with limited liquidity, resale or reassignment is possible with our assistance, and a servicer arrangement can make that path smoother. Our guide on what backs the payments covers the liquidity trade-off in full.

Matching a structure to your goal

In short: pick the frequency that matches how you want the cash to arrive, decide whether a level or increasing stream fits your horizon, and read the full schedule before you commit. If you want help finding a structure that fits, our team can point you to listings that match. Start with how buying works or browse the live inventory.

Frequently asked questions

Can I buy a payment stream that pays every month?

Yes. Monthly is the most common structure on our inventory, and you will also find quarterly, semi-annual, annual, and lump-sum streams. Each listing shows its frequency, amounts, and full schedule.

What does "with annual increases" mean?

It means the payment amount steps up by a set percentage each year, a feature written into many original structured settlements. An increasing stream helps income keep pace over a long horizon; the exact step-up and every future amount are shown on the listing.

Why is the payment amount an odd, non-round number?

Usually because the original payee is selling only a portion of their annuity, so the marketed amount is that portion of the underlying payment. The carrier splits the payment directly, or a third-party servicer divides it among the parties.

See the range of structures available now on our live inventory, or talk with our team about full terms and available pricing.