Secondary market annuities offer higher rate of return than a traditional fixed annuity, indexed annuity or certificate of deposit. Secondary market annuities are offered and paid to the investor directory from the insurance companies regardless of you being the owner or not. We have to understand what is secondary market annuity? All of us have seen the television commercials which offer to buy an annuity for a hefty amount. Some people are paid some amount of money when they incur personal injury settlement. More often people are unable to wait for long term returns and are willing to sell away their payload for hefty payments in cash. Whenever a client sells their annuity or structured settlements, it creates a secondary market for these annuities. One such example is that of lottery winners. They are given two options. They can settle for lifelong payment in installments or accept hefty amount of cash right now which is much less than the total winnings.
Who makes all the payments?
Annuities are sold by the life insurance companies. The life insurance companies are one of the oldest and safest companies in the world. Secondary market annuities are created when someone sells their settlement for a hefty amount in cash. The life insurance companies do not really care who they have to make the payments to. Sometimes however they are obligated by law to make some unwilling payments. Hence the payments are ready and safe. One can sleep well at night knowing that their assets are well insured by the company and also the law.
How can one make money?
The secondary market annuities pave the way for various types of investors. The secondary market for annuities always provide potential investors with a much higher yield than the traditional annuities and certificate of deposits. As the annuities are sold for pennies on the dollar, there is a huge spread that a new investor will gain from higher yields. One of the common options for these annuities is waiting for returns in the near future. Investors can sign contracts which deal in huge profits after a waiting period of 10-15 years. The positive part of such contract is that the investors can choose the yield, duration, insurance company and also the time for which the payments will begin.
Retirement planning made easy- How?
While an individual grows old, the assets become extremely crucial. The bitter truth is one tends to weaken the grip towards their assets for which they have worked very hard over the years. While one is young, lost saving can be easily replenished. However, old age does not allow this privilege. The luxury of time fades into oblivion with each passing day. People often invest in safe money policies. These are pretty useless considering the fact that the return rate is very low. Calculating the worth of money on a timely scale, it seems as if one loses money in these policies. Due to long term investment, one can easily overlook the current market volatility and hence ensures peace of mind.