Secondary Market Annuities
Secondary market annuities offer fixed term payment streams from top quality insurance carriers. The high quality creditworthiness of the insurance carriers usually translates to lower returns to the investor, however secondary market annuities come with yields one to four percent higher than comparable assets.
The term secondary market annuity has become an industry standard referring to a factored structured settlement, previously owned annuity or in-force annuity.
Secondary market annuities offer all the benefits of the primary market, period certain, guaranteed yield annuity. Simply put, secondary market annuities offer higher returns without additional risk.
Origin of the Secondary Market Annuity
The term secondary market annuity refers to structured settlement payments, period certain immediate annuities, and lottery payments. The payment stream is an existing, fixed receivable.
The majority of secondary market annuity transactions are from structured settlement payments for damages or personal injury. These payments are funded by annuities issued by U.S. based insurance companies, like MetLife, New York Life, Prudential and others.
When the original owners of payment streams sell their future payments for cash today, a secondary market annuity is created; it is simply an existing payment stream, transacting in the secondary market.