Glossary of Terms for Secondary Market Annuities
C.O.L.A. (cost of living adjustment)
The Cost Of Living Adjustment can be a component of Secondary Market Annuities, providing for a yearly inflation linked adjustment to income streams usually at a predetermined fixed rate of Interest.
On our site we mean the purchase price of a given structure.
Primary Issued Annuity
An annuity purchased directly from an insurance or annuity company (online or through a broker)
A change in ownership of an actual primary annuity contract; no court order required.
The original annuity company or insurance company responsible for making payments.
Rate is the Internal Rate of return expressed as an effective yield. This is also known as the discount rate, the rate required to balance the investment and the total return over time.
The total or aggregate payments you will receive over the life of the annuity, not accounting for any interest or reinvestments.
SMA (Secondary Market Annuity)
SMA’s are created when the rights to receive specific future payments that originate from an existing annuity contract become available for purchase. It is not and insurance product nor and insurance contract.
All SMA Hub payments are collected by a servicing agency on your behalf and forwarded to a bank of your choice.
Status - In Stock
The traditional way of selling SMAs is fraught with delays and a significant potential for fallout. These complications are caused by failure to receive court approval and failure to meet due diligence. The SMA Hub In Stock SMA has already received court approval and has also met our stringent due diligence process. It is immediately available to your client, off the shelf.
Status - Pre Order
The court date is set and due diligence is pending. Purchasers reserving on a “Pre-Order” basis should be aware that the case may not be approved or due diligence may uncover issues that prevent the case from closing. The purchaser should be aware that there is risk of falling out and should be prepared to select a replacement in that scenario. There is no cost if a case falls out, other than time lost.
Status - Reserved
“Reserved” cases are spoken for, however they may drop out. Please let us know if the payment stream fits, as we do accept backup positions and so that we can find a similar payment stream for you.
The term, in years, of the final payment on any given contract. The exact date on any given structure can be viewed in the cash flow section by clicking “+” to show precise payment details.