Essential Information Worth Knowing About Secondary Market Annuities
Folks who have won lawsuits or lotteries have certainly heard about annuities. In order to settle these matters, annuities are given but as opposed to a big one-time payment, the benefactor is provided with a series of payments. The duration of the payment can depend on the amount of the payment sum. Basically, that’s how annuities work.
However, there are some folks that just don’t want or just can’t afford to wait a long time in order to complete the payouts. In this type of circumstance, the individual can opt to sell his or her future payouts to a person who’s willing to pay a one-time lump sum which is given immediately. This type of transaction that concerns the resale of annuities is referred to as secondary market annuities.
Secondary market annuities goes in many names such as In Force Annuities, Secondary Market Income Annuities, and Structured Settlement Annuities. Regardless of the name, the all mean exactly the same. Just to be clear, the transaction will be taking place between the recipient of the payments and the buyer. There will be no link between the buyer and the insurance company. In order to ensure all legal matters, a lawyer and a broker will be required during the proceedings. When it comes to secondary market annuities, the most common type is the Structured Settlement Annuity.
Structured Settlement Annuities – those who have won a legal case which involves accidents like workplace injuries, vehicle accidents, slip and fall claims and many others end up receiving a series of payouts instead of being given one lump sum. This is considered good for the recipient because they can get by without working as they are basically being given a steady income source.
However, there might be instances that the recipient will change their mind and they would prefer to receive a lump sum payment instead. The recipient can choose to seek the assistance of a factoring company. The factoring firm will surely offer to purchase the future remaining payouts. Discounted rates will then be applied to future payouts and these will be made available through professional brokers that specializes in annuities. The annuity broker can then offer these products for folks to purchase. As for the seller, he or she will petition to the court of law that future payments will be redirected to the buyer.
Purchasing secondary market annuities for sale can be a fairly complex affair. If you are thinking about buying, it is highly recommended that you seek the expertise of a professional financial planner to help you decide if the product will suit your own situation. If you don’t tread lightly regarding this matter, you might end up regretting a lot of things. It’s highly recommended that you tackle this matter with enough information.
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