Annuity Issuer (Carrier)
The insurance company that wrote the annuity funding a structured settlement and that makes every payment. The carrier’s claims-paying ability — reflected in ratings like AM Best’s — is what stands behind the income stream.
APR (Truth-in-Lending Basis)
The annual percentage rate: the same economics as effective yield, stated the way consumer-lending law requires (twelve times the monthly rate). It reads slightly lower than effective yield. We publish both on every deal.
Assignment
The formal transfer of the right to receive specific payments from one party to another. In this market, an assignment is only effective once a judge signs the transfer order.
Best-Interest Standard
The legal test a judge applies before approving a transfer: is this sale, on these terms, in the best interest of the seller (and their dependents)? It is the core consumer protection of the secondary market.
Claims-Paying Ability
An insurance carrier’s financial capacity to honor its obligations. Rating agencies such as AM Best grade it (A++, A+, A…). Payments purchased in this market rely on the carrier’s claims-paying ability, not on market performance.
COLA (Cost-of-Living Adjustment)
A built-in annual increase in a payment schedule — for example, payments that grow 3% every twelve months. Where a stream carries a COLA, our fact sheets state it; where payments grow on a custom schedule instead, we list every exact amount.
Court Order (Transfer Order)
The judge’s signed order approving a structured settlement transfer under the applicable state statute. It directs the carrier to pay the transferred payments to the new owner. No order, no transfer — in every state with a protection act.
Discount Rate
The interest rate used to convert future payments into a present-day price. The rate a seller accepts and the yield a buyer earns are two sides of the same calculation.
Discounted Cash Flow
The valuation method behind every deal in this market: each future payment is worth slightly less today than its face amount, and the sum of those discounted values is the fair present price of the stream.
Effective Annual Yield
The compounded annual return produced by a payment schedule against its purchase price — the number to compare against a CD’s APY. Locked at funding; unchanged for the life of the stream.
Exact Stream
Our house term for full payment-level disclosure: the count, the exact dollar amounts, the exact dates, and the penny-accurate total of every payment you’re buying. It appears on every deal card, fact sheet, and offer email we publish.
Excise Tax (IRC §5891)
The punitive federal tax imposed on any funding company that completes a structured settlement transfer without court approval. Enacted in 2002, it is the reason the entire industry runs through the courts.
Factoring Transaction
The industry’s technical term for the purchase of structured settlement payment rights at a discount — what the IRS calls these transfers in the federal statute.
Funding Company
A firm that buys future payment rights from payees at a discount and pays a lump sum today. MJ Settlements sources paper through this market and delivers it to income investors.
Guaranteed Payments
Payments certain to be made on their scheduled dates regardless of whether the original annuitant is living — as distinct from life-contingent payments. Every deal we list consists of guaranteed payments unless explicitly stated otherwise.
Income Over Cost
Our plain-English measure of a deal’s total profit: the sum of all payments you’ll receive minus your purchase price.
Irrevocable Assignment
Once the court approves a transfer and it funds, the assignment cannot be undone by the seller, the carrier, or anyone else. Your payment rights are fixed by court order.
Life-Contingent Payments
Payments that continue only while the original annuitant is alive. These carry mortality risk and are priced differently. We deal in guaranteed payments; if a stream ever includes a life-contingent portion, we say so explicitly.
Lump Sum
A single payment of a fixed amount on a fixed date — either what a seller receives at closing, or a future payment type an investor can buy (as opposed to a monthly stream).
Model State Structured Settlement Protection Act
The template statute, developed with industry and consumer input beginning in 2001, on which most states’ transfer laws are based. It standardized disclosures, notice periods, and the best-interest review nationwide.
NASP
The National Association of Settlement Purchasers — the secondary market’s trade association, founded in 1996. It maintains industry standards and consumer-education resources. MJ Settlements is a proud sponsor of NASP’s annual conference.
Payee
The individual entitled to receive structured settlement payments — the seller in a secondary-market transaction.
Payment Stream
A scheduled series of payments — monthly, annual, or custom — with defined amounts and dates. The asset at the center of everything we do.
Primary Market
The industry that creates structured settlements in the first place: defendants, casualty insurers, settlement brokers, and the annuity carriers that fund the payments.
Secondary Market
The regulated market in which existing structured settlement payment rights are bought and sold, under court supervision. Where MJ Settlements operates.
Secondary Market Annuity (SMA)
An investor’s purchase of court-ordered rights to an existing annuity’s payments — carrier-backed income at yields typically well above comparable new annuities, CDs, or Treasuries.
Split (Slice)
A portion of a larger payment stream offered on its own — for example, $600/month carved from a $3,286/month stream. Splits let investors participate at lower entry points; the remaining portion stays available separately.
Structured Settlement
An arrangement resolving a lawsuit — commonly personal injury or wrongful death — in which the defendant’s insurer funds an annuity that pays the plaintiff over time instead of in one lump sum. In use in the U.S. legal system since the 1980s.
Structured Settlement Protection Act (SSPA)
A state statute governing transfers of structured settlement payment rights — requiring disclosures, notice, and court approval. Enacted in 49 states.
Transfer
Any sale or assignment by a payee of rights to future structured settlement payments in exchange for consideration — the transaction an SSPA regulates.
Transferee
The party acquiring payment rights in a transfer — ultimately, the investor whose name the court order directs payments to.