Secondary Market Structured Settlements


Individuals involved in legal claims for personal injury often accept a structured settlement in which they receive regular, fixed payments over a set period of years and/or lump sums at stipulated times from an annuity. As circumstances change, the annuitants may find that they need cash now instead of payments later.  Using the services of a factoring company, they sell future payments at a discount for cash. Financial Partners, in turn, offers the payment rights to these annuities, called Secondary Market Structured Settlements, to buyers, who invest in structured settlement. The purchase process can take 30 to 90 days, and requires that the individual selling the payments receive approval to sell from a court of competent jurisdiction (even if it was an out-of-court settlement!) for a change in the terms of their settlement.  

The future income stream is generally a fixed, definite payment contract.  It may include lump sums, annual increases, deferral periods, or it may be contingent on the lifespan of the seller.  Typically, the Secondary Market Structured Settlement payments are made regardless of whether or not the existing annuitant or the buyer is alive, meaning these payments are not contingent on any individual’s life.



Second Market Annuities

Sometimes annuitants can elect to sell their future payments from an existing annuity income stream, either from an Immediate Annuity, a Factored Structured Settlement, or a Lottery Prize Payout contract to someone else in exchange for a lump sum payment today. The "resale" of these annuities are Secondary Market Annuities or factored structured settlements.

Yields on Secondary Market Annuities are higher simply because the seller of the payment stream is willing to sell at a discount for cash today. Clients benefit from that discount and receive a higher yield on the cash flow compared to comparable annuity products available in the open markets. In contrast to variable annuities and fixed indexed annuities, secondary market annuities have no fees or ongoing costs other than account servicing and IRA costs if applicable.  The purchase price for a secondary market annuity includes all legal review, closing costs, and transaction costs.  There is no annual cost, with the sole exception of nominal account servicing and costs to administer your IRA if applicable.




About our Secondary Market Structured Settlement page.

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