What are Secondary Market Annuities or SMA’s?
SMA’s are created when the right to receive specific future payments, that originate from an existing annuity contract, become available for purchase.
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 provide yields one to four percent higher than comparable assets.
The term secondary market annuity has become an industry standard referring to the rights to receive specific future payments that originate from an existing annuity and become available for purchase. These cash flows originate from factored structured settlement or an existing primary annuity contract that allows for it to be sold or assigned to someone else.
Secondary market annuities offer many of the primary market benefits, period certain, guaranteed yield, without all the restrictions associated with insurance contracts. Simply put, secondary market annuities offer higher returns and fewer restrictions, with relatively little additional risk.