The clearest way to understand your own offer is to look at it from the other side of the table. A buyer is not lending you money and is not taking your credit risk. It is buying a stream of payments from a highly-rated life insurance company at a discount, and that discount is its entire return.
What the buyer is actually buying
Payments from a large life insurer, on dates fixed years ago, backed by an annuity and by state guaranty arrangements. The credit quality is high and the timing is certain, which is precisely why the asset is attractive to fund it. What the buyer is really pricing is the time value of money plus its own cost of capital plus margin, and the discount rate it quotes you is where all three end up.
What that means for your negotiation
The gap between the face value of the payments you sell and the money you receive is the discount, and it is the whole price of the transaction. The trade body's reported range is between 9% and 18%, and a few points over a long stream is a very large sum. Florida's statute names the yardstick a court measures it against: discounted present value is the fair present value of future payments, determined by discounting them using the most recently published applicable federal rate.
The federal rule that makes it universal
Congress made the court step effectively compulsory without legislating for state courts at all. a federal excise tax falls on a person who acquires structured settlement payment rights in a factoring transaction unless the transfer is approved in advance in a qualified order, and the section is quoted in full on the United States row of the record: a final order, judgment or decree finding that the transfer does not contravene any federal or state statute and is in the best interest of the payee, taking into account the welfare and support of the payee's dependents.
Questions people ask about structured settlement investments
Does a court really have to approve this?
Yes, in every state. The federal exception in 26 U.S.C. 5891(b) applies only where the transfer was approved in advance in a qualified order finding it is in the best interest of the payee, taking into account the welfare and support of the payee's dependents.
What is the single biggest variable in the price?
The discount rate, and after that how far in the future the payments fall due. The reported range across the market is between 9% and 18%.
Do you take a share of what I get?
No. Buyers pay a flat fee for the enquiry itself, never a share of the discount and never anything contingent on a transfer completing.