Structured Settlement

What are Structured Settlements from the Secondary Market Annuities?

Secondary market annuities are court ordered Structured Settlements. The secondary annuities market exists because individuals do not want to wait (or cannot afford to wait) years for structured payments. Often, individuals are awarded annuities as a result of a lawsuit or winning a state lottery. Instead of a large one-time payment, they received a series of payments over time. These individuals can elect to sell their future payments to someone else in exchange for a lump sum payment today. The “resale” of these annuities are secondary market annuities. Secondary market annuities may also be referred to as “pre-owned annuities” or “in-force annuities“

Higher Yields Through Discount Purchases

You can purchase a secondary market annuity from the original owner at a discount, and have the stream of income or lump sum payment(s) assigned to you. These plans will typically offer a rate of return well above standard fixed annuities, immediate annuities, CDs, or bonds of a similar credit quality.

This increased yield is created through the original owner selling these payments at a discount, not the insurance company paying the higher specified rates.

The insurance company that backs the annuity payment is obligated to make these payments regardless if it is to the original owner or the new investor. When these income streams were originally issued they were issued at current market rates. Again, the yield enhancement is created purely through the mechanics of the factoring process and the existing owner’s willingness to sell their payment stream at a discount.

A Secondary Market Annuity is any annual payment sold at a discount on the open (secondary) market. The 5 most common types of secondary market investments include:

1. Factored Structured Settlements (FSS)
2. Lottery Winnings
3. Annuity Income Streams
4. Life Settlements
5. Viatical Settlements

Factored structured settlements (FSS) are existing structured settlement payments. They were awarded by settlement or jury to the injured party and funded through any number of insurance companies. The awardee, or “Original Payee,” may have been the person hurt, or it may have been a member of his or her family. The payee (seller) desires, for any number of reasons, to sell a portion or all of their payments in exchange for a lump sum of cash.

Lottery Winnings are the payments available for sale from someone who actually won a state lottery prize. Regardless of whether you are looking to sell your payments or buy someone else’s prize, the process is very similar to that of the factored structured settlements (FSS). They must also go through a court approval process, which will delay any transfer from seller to buyer, although not quite as long as an FSS dealing. The lottery transfer process usually takes 30 to 45 days. Lottery prizes are all the direct obligations of state lotteries.

Annuity Income Streams are existing immediate annuities whereby the original purchaser has decided to sell his/her existing payment stream in exchange for a lump sum of cash. This asset is typically not liquid and has no commutable value whereby the investor can “put” it back to the insurance company, so the seller looks to the secondary markets to supply the liquidity in exchange for the remaining payments. Unlike FSS, SMA, and Lottery Winnings, transferring from seller to buyer does not require any type of court approval.

Life Settlements are sales of an unnecessary life insurance policy to a third party for more than its cash value and less than its face value. This is an excellent option for policy owners worried about lapsing policies. A life settlement is an alternative to a surrender or lapse of a policy, or when the owner of a life insurance policy no longer needs or wants the policy, the policy is under-performing or can no longer afford to pay the premiums.

Viatical Settlements are sales of a life insurance policy by the policy owner before the policy matures. Such policies are sold at a price discounted from the face amount of the policy but usually more than the premiums paid or current cash surrender value.

Why Secondary Market Annuities?

For the savvy investor, secondary market annuities offer superior yields to other low-risk investment options because they’re purchased at a discount.

Purchasing structured settlements can be an excellent strategy whether you’re planning your retirement, transferring wealth to your heirs or just seeking to supplement your income.

Secondary market annuities have been a well-kept secret and in the past were purchased almost exclusively by major financial institutions.

But the global financial meltdown of 2008 changed that, and now more individual investors know about them.

Are Secondary Market Annuities Safe?

The payment of these annuities are safe and dependable — personal annuity receivables are direct obligations of top-rated insurance companies such as MetLife, John Hancock, Pacific Life, Allstate, Prudential, The Hartford, Aegon, and other A and AA rated carriers. Annuities from lottery winnings are all the direct obligations of state lotteries, and pre-defeased with U.S. Treasury instruments maintained in segregated trust funds.

However, there are risks to be aware of when purchasing structured settlements. Proper due diligence is vital to ensure safety.

With the proper due diligence, secondary market annuities are among the safest investments.

However, without the right knowledge and team, your risk can be significantly raised. Be sure to understand all risks before investing.

Why Use Us?

We have partnered with the very best companies and attorneys in the nation allowing us to be the premier source for secondary market annuity, and since then we’ve cornered the market from A-to-Z, from advisers to endowments. Rest assured, we’ll dig deep to custom-tailor a plan to work with and around your current lifestyle and specific needs.

Are Secondary Market Annuities a Good Fit For You?

Secondary market annuities work well for the following investors:

• Income for retirees
• College savings
• Supplemental income for working individuals
• Wealth transfer to heirs
• Funding of trusts
• Building a pension for the future
• Income with wealth replacement where you buy an income stream or a lump sum
• Funding a structure settlement where you can do better with secondary market vs. primary market
• Short term cash management
• Zero coupon bond investing alternative
• All fixed income investors
• Pre 59 ½ investors that need liquidity prior to being 59 ½
• IRA and non-IRA investors

What is the buying process?

The buying process is simple and straightforward: Review our Offer Sheet, and then contact us to reserve the case. Complete our Purchaser Information Worksheet and send to us.

We’ll prepare and send you a Purchase Agreement. Sign and send us that, along with a $5,000 earnest money deposit. The closing process takes between 30-60 days. Once completed, we’ll transfer the funds to an approved custodial account.