Money can be made by investing in a secondary market annuity. These annuities are purchased from the original owner at a discount, and the yearly income or lump sum payment is assigned to the secondary annuity buyer. You can find secondary annuities through annuitystraighttalk.com.
These plans will usually provide a rate of return that is well above standard fixed annuities and immediate annuities. CDs and bonds of a similar credit quality do not provide as great of a yield. The reason for the increased yield the original owner is selling their annuity payments at a discount to entice a buyer.
Many annuities come about through a court settlement which is paid as an annuity over many years. Court settlements are often placed with an insurance company. A state lottery will often pay winnings in the form of an annuity, or state lottery payouts are backed by the state. They can also be invested in government bonds.
The insurance company that issued the annuity is obligated to make these payments even if the original holder sells it to an investor. When these income streams were originally issued they were issued at current market rates. However, when the original owner sells at a discount the new price automatically results in a higher yield. The greater the discount, the greater the yield will be. The secondary market annuities will provide superior yields compared to other low-risk investments, because they’re purchased at a discount.
Purchasing structured settlements can enhance a person’s retirement income, or they can increase current income. These investments are becoming more popular since the financial crisis of 2008 prompted people to look deeper into the investment options.
Most income annuities are one of the safest forms of investment, because the money is usually invested government securities and high-grade corporate bonds. Insurance companies handling income annuities should have the highest Standard & Poor’s credit ratings. Usually, great caution is exercised before an insurance company choses an investment for an annuity.
However, the investor’s risk can be significantly raised if they do not have the right experts advising them. Although the secondary annuity market is not a mine field, there are precautions that an experienced advisor will be aware of.
Not all annuities start making payments upon purchase. Sometimes an annuity will begin making payments in one year or even much longer. However, the investor can shop for the yield, length of the annuity, the insurance company or holder of the funds, and the date the payments will begin. One important fact for the investor to understand is a contract on the market today may be gone tomorrow. An investor should have a plan for what they want to buy so that they can act quickly.
In today’s economic times, there are not many investments that can promise the income and the yield that these annuities promise. There are not that many investments that can be considered as safe.