Since its inception, the secondary annuity market has grown exponentially as a resource for those looking to receive money sooner from their future annuity payments. This differs greatly from what is commonly referred to as the primary annuity market, where individuals purchase an annuity to facilitate future financial security in the form of periodic payments. In the secondary annuity market, those who already have an annuity can sell some or all of their future payments in exchange for a lump sum of cash.
For those who receive a structured settlement annuity as a result of a personal injury lawsuit or wrongful death claim, the secondary annuity market can be incredibly useful. Even if you thought an annuity was the best course of action at the time of your settlement, circumstances can change. If an individual finds themselves in a position where their payments are not enough to cover living expenses, selling future payments may be an effective way to get the cash they need to reach their financial goals.1
How Does the Secondary Annuity Market Operate?
In just about every case, structured settlement or annuity payments sold in the secondary market are purchased by a company specializing in buying future payments in exchange for cash. While the transaction itself is typically not very complicated, all structured settlement payment sales must gain court approval. This is due to state and federal regulations. In most cases, the sale of an annuity which was not the result of a court settlement — such as a personal retirement annuity — will not require court approval before completing a sale.
Once a court has approved the transaction, the structured settlement payment purchasing company will pay the structured settlement recipient an agreed upon lump sum and the company will begin receiving the structured settlement payments.1
How is the Secondary Annuity Market Regulated?
Once the secondary annuity market established itself as a legitimate industry, the government took action to protect consumers interested in selling their future annuity or structured settlement payments. Currently, 48 states have laws that regulate the sale of structured settlement and annuity payments. These laws are designed to protect the consumer by requiring certain disclosures, a court order process, and a best interest finding by a judge.
Contact Peachtree Financial Solutions
If you would like to learn more about how to sell an annuity or structured settlement payment stream, contact Peachtree Financial Solutions. We have helped numerous people across the country sell their structured settlement payments for a lump sum of cash. .
Peachtree Financial Solutions does not provide legal, tax, or investment advice. Please contact independent professionals for those services.