If you are someone who have recently won a lawsuit case or perhaps you're a very lucky lottery winner, then you will have no doubt heard of annuities . To get these settlements going, annuities are awarded but instead of a large one-time payment, the recipient is given a series of payments over time. The duration of the payment can depend on the amount of the payment sum. To put it simply, that's how annuities generally work.
But there are instances that the benefactors won't or can't wait for numerous years in order to complete the payment sum. For cases like this, the individual has an option to sell the future payouts to someone who's willing to buy them in exchange for a lump sum payment which to be given in the soonest possible time. This sort of transaction which involves the resale of annuities is called secondary market annuities .
Secondary market annuities goes in many names such as In Force Annuities , Secondary Market Income Annuities , and Structured Settlement Annuities . Regard of what they are called, they still refer to the same thing. Before you misunderstand, the transaction will happen between the recipient of payouts and the buyer. No transaction will happen between the buyer and the institution that's providing the payout. To address this in the most legal way, a lawyer and a broker must be present. One of the most common types of secondary market annuities is the Structured Settlement Annuity .
Structured Settlement Annuities - those who have filed and won cases that involve unfortunate accidents like slip and fall claims, workplace injuries, vehicle accidents and so on have likely received payouts in series rather than being settled using one large payout. Since they are essentially receiving a stable income source, recipients won't even need to work which is considered to be beneficial for them.
Although there have been cases that the recipient would rather receive the settlement sum in full rather than receiving a series of payouts. The recipient can choose to seek the assistance of a factoring company. What happens after is that the factoring firm will offer to buy the future 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. Find more information on secondary annuities here.
Buying secondary market annuities for sale today can be fairly intimidating. If you are planning to purchase, it is best that you consult with a professional financial planner so you can determine if the product will best suit your situation. There are people who have regretted their decision by approaching this matter haphazardly. Equip yourself with proper information before deciding to tackle this matter. About the Author
Finance major from Ohio State University