Existing period certain annuities, sometimes known as ‘self owned annuities’ form a small part of the Secondary Market Annuities inventory. They are less common than Structured Settlement Annuities.
These are generally annuities directly owned by a seller, such as an immediate annuity with a period certain.
Why would someone sell one of these?
People’s circumstances change. Say a 60 year old investor bought a lifetime annuity with 20 year period certain payout. 2 years in, they find they have terminal cancer.
They can either continue to receive the small monthly payout, or, they chose to sell their remaining 18 years for a lump sum to enjoy their few remaining days.
The annuity pays out regardless of their lifespan for 18 years, and the payee can be transferred to a new individual in a secondary market transaction.
In a case like this, the transfer process can be much faster and easier- a simple issuing company form can irrevocably change the beneficiary or ownership of an existing annuity from the Seller to you, and the discount rate and resulting yield to you is generally the same high rate as with our Structured Settlement Annuities .
There is another market place we DO NOT operate in that is also inconveniently known as ‘Secondary Market Annuities’ which deals in sales of existing VARIABLE annuities with certain minimum value guaranteed death benefits insuring appreciation on the principal.
In this marketplace, which we DO NOT operate in, a seller with a variable annuity with guaranteed appreciation rate as a death benefit may sell their annuity to a stranger. The stranger then can invest in the stock market with the principal insured. It becomes a risk free way to play in the stock market.
These ill conceived variable annuity contracts are no longer issued and indeed are the reason many variable annuity issuers like Hartford are exiting the annuity business. They over-promised, and now face the prospect of delivering on benefits that are turning out to be unrealistic.
You can read about these here, but remember, these are NOT what we deal in at SecondaryMarketAnnuity.Net