What is a Secondary Market Annuity?
When we say ‘Secondary Market Annuity’ we refer to period certain, fixed-term annuity payments that are assigned in a ‘secondary market’ transaction.
These annuity payment streams belong to individuals who seek to sell their future payments in exchange for cash today in a ‘factoring’ transaction. Typically, the payments are guaranteed and period certain payments awarded to individuals in structured settlements. The right to receive these annuity backed future payments is transferred in a court-ordered and regulated process.
In addition to factored structured settlements, Secondary Market Annuities may also refer to in-force period certain annuities or a lottery prize payout. In any situation, these pre-defined, fixed term income streams offer a higher yield because the future payments are sold at a discount.
The vast majority of Secondary Market Annuities we sell, and which we focus on this website, come from structured settlements, whereby the original payee/ recipient decides to sell their future payments for cash today. Through a court-ordered assignment process, purchasers acquire the right to receive the existing payment stream from the current recipient of the income. This discounted sale transaction creates an opportunity for a profitable, safe investment in an in-force payment stream.