Essential Information Worth Knowing About Secondary Market Annuities

Individuals who have recently triumphed in a legal case or perhaps have been a lucky winner of the lottery are certainly familiar with annuities. Annuities are used to settle these matters but instead of giving a substantial one-time amount, the awardee is provided with a series of payments. Annuities can be given for numerous years depending on the sum of the payment. To put it simply, that's how annuities generally work.

However, there are cases wherein the recipients don't want to or just can't afford to wait for years 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. Despite what it's called, they all essentially mean the same thing. 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. 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 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 regarded as beneficial for the recipient since they won't even have to work because they are essentially provided with a steady source of income.

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. The factoring company will then place a discounted rate on future payouts and will be made available via annuity brokers. The brokers will then offer these products to potential buyers. A petition must be filed to the court of law by the seller stating that future payouts will be given to the buyer.

Buying secondary market annuities for sale today can be fairly intimidating. Potential buyers are encouraged to consult with a financial planner before buying so they will know if the product is beneficial to their current situation. If you don't tread lightly regarding this matter, you might end up regretting a lot of things. It is always best to tackle this matter with an informed mind.