Prior to purchasing a secondary market annuity, it is good to fully explore information behind how structured settlements are created. A structured settlement is an agreed to periodic payment stream that injured person becomes entitled to as part of the settlement of a lawsuit instead of a one-time payment when a lawsuit gets settled. Settlements like this usually result from civil lawsuits such as wrongful death, personal injury, or medical malpractice.
More often than not, once the structured settlement is agreed to, the defendant or its insurer, purchases an annuity to fund the payment stream obligation. The annuities are generally issued by highly rated insurance carriers that in exchange for a fee assume the obligation to make the periodic payments as set forth in the settlement agreement.
Structured Settlements are often a very good thing for the injured plaintiff as the annuity provides some security and steady income over a period of time. However, from time to time, the structured settlement may be too rigid for the recipient in so far as the payment stream is locked into a fixed schedule ? you cannot alter the payment structure in any way once you agree to it.
As a result of this demand for liquidity on occasion, several business outfits came into existence that offer structured settlement payment recipients a large lump sum in exchange for some or all of the periodic payment stream provided in the structured settlement. In short, the structured settlement payee who has an immediate demand for cash contracts with these companies to convert the future periodic payment stream. The justification a person has to exchange the future annuity payments for immediate cash vary greatly.
A structured settlement purchased through this process is often referred to as a Secondary Market Annuity. These Secondary Market Annuities were once purchased almost exclusively by banks and financial institutions but as individual investors noticed the yield available through Secondary Market Annuities, more and more are today being placed outside banks and financial institutions.
While purchasing a structured settlement or annuity in the secondary market can be desirable for a private, due diligence is required in reviewing not only the quality of the investment but also the capability of the company brokering the secondary market annuity. From the perspective of investors, the critically unique aspect to contemplate in acquiring secondary market structured settlement payments is the quality of the brokering company?s underwriting and its compliance with the various applicable federal and state laws. Compliance with the legal framework in this area is essential in order to ensure that the annuity returns the investment in the future.
The team at Pacific Structured Assets can walk you through the entire process and make sure you are comfortable with Secondary Market Annuities. Our team has combined decades of experience and have reviewed, processed and/or originated thousands of secondary market annuities.
If you are interested purchasing Secondary Market Annuites, please contact us at www.PacAssets.com or 1/800-449-6311 to view our current secondary market annuity inventory inventory.
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