Mike Henderson

Are you sure you want to sell your annuity payments

by Mike Henderson

Owning an annuity offers many benefits. The most valuable benefit is that it allows you to accumulate a large amount of money during your working years to guarantee later payments for a period of time or for the rest of your life. Annuities are considered as both investment and insurance accounts. They are bought for the same purpose as other tax-deferred accounts like pension plans – putting aside money for retirement. In other cases, annuities are settlements made to the holder after an accident.

Financial experts advise that keeping an annuity untouched until its maturity is the best option. However, life changes may not always permit this. Unavoidable financial hardships such worrying debt levels, hospital bills, unexpected costly emergencies and so on sometimes push an annuity holder to a situation whereby selling annuity payments becomes an option. When you find yourself in such a situation, it’s imperative to understand a whole lot of issues that surround the sale of annuity payments. Some of these issues are explained below.

Get the difference between surrendering and selling annuity payments

Most seasoned financial professionals may understand the meanings of the terms “surrendering” and “selling” with regard to annuities. However, not many annuity holders who have just started thinking about selling their annuities might clearly know the difference between surrendering and selling. It’s important to first get clear on what you want.

Surrendering an annuity simply means breaking the contract. The annuity holder chooses to “surrender” annuity settlements and a fee is deducted from the proceedings. Annuity providers establish a surrender period. On average, the surrender period lasts 7 to 10 years in the U.S. Withdrawing any funds before this period ends attracts surrender charges that can go up to 15% or higher.

Selling an annuity involves selling annuity settlements or payments without paying any surrender fees or charges. You sell a set amount of the future annuity settlements to the buyer so that you get money now instead of later in the future. Of course, the transaction involves some calculations such a determining the Net Present Value (NPV) of your payments.

Annuity Payments Selling Options

  1. Partial: You can sell just a portion of your payments. There are two ways of selling annuity payments partially. One way is selling annuity payments for a specific period. For instance, you can sell payments for the first 5 years. You will not receive any payment during this period but recurring payments resume once the 5 years are over. The other way is selling a portion of each payment through the contract period so that you continue receiving regular but smaller payments.
  2. Selling annuity payments in entirety: This option lets you cash in the entire investment at once. You sell all your annuity payments that you’d have been paid through the full term of the contract. This implies that you will not get periodic income payments in future but you have a lump-sum of money that you can invest or use it in any desired way.

How selling annuity works

Useful Tips for Selling Annuity Payments

Selling annuities is a serious undertaking and one that should be approached cautiously. You are probably in debt, you have a searing hospital bill, or you need to upgrade your house or buy a new one. If you’ve come to a point where you are considering selling your annuity, you must be under some sought of pressure. It is always good to remember that it’s easy for one to make a wrong decision when under pressure. The following tips will help you as you go about the whole process:

  • Don’t be hasty to sell. People have regretted not taking enough time to weigh options before calling an annuity agent and signing selling documents. A rush decision can make your current situation even worse. Take time to think about your long-term financial strategy and alternative options of raising the needed cash. Even when you are certain that you want to sell your annuity, think through the implications of taking any option on your financial status and general well-being.
  • Have an annuity expert by your side. With a myriad of companies purporting to offer the best deal on the sale of annuity payments, you can be sure that choosing the best one is overwhelming, to say the least. Some will have hidden charges while others are downright unscrupulous. Having a professional at every step of the process will help you avoid pitfalls such as scams. The expert will also help you to get the best deal that will give you the highest payment in cash.
  • Shop around and be ready to bargain. To get the best deal, you need to assess different buyers according to what they are offering. What charges are involved in the transaction? Do they offer you a guarantee? Most importantly, make sure that they are certified to perform the kind the transaction (for instance, an agent who has specialized in variable annuities may not be allowed to do fixed annuity transactions).
  • Lastly, choose an annuity purchaser wisely. Look for a company that has a track record of helping customers cash in their annuities in the most efficient and convenient manner. The ideal company will not pester you into the deal. Rather, it will provide you with information and guidance throughout the process so that you control your decisions. Professionals in such a company will give you an honest evaluation of your situation and focus on your interests rather than just making profits.

Should you consider selling your structured settlements

by Mike Henderson

If you are a victim of personal injury and are looking for a settlement, then structured settlements are the way to go. In a structured settlement, you would receive part of your compensation in periodic payments. This compensation would arise as part of the lawsuit you have won. You can claim payment of money with respect to a personal injury lawsuit. During negotiations, you being the plaintiff can either request for a structured settlement or you will be offered one by the defendant. Structured settlements seek to avoid unnecessary expenditure of money by not going to trial. In certain cases, albeit requiring the fulfillment of certain conditions, you as a claimant would not owe any Federal Income Tax on the money received. These periodical payments may be funded by the purchase of annuities which have been paid in full for the life of the payment stream and insured.

Why Should You Sell Your Structured Settlement

Once you become a victim of personal injury and win a lawsuit for a structured settlement from the defendant you elect to receive part of your settlement immediately. The rest of the settlement can be paid off in a series of structured, periodic payments that can be customized according to your needs in respect to the amount and time of payments. However the companies who insure your settlements must comply with Internal Revenue Code 130 of the United States which does not allow for any modification with respect to the schedule of payments. You cannot get the payments due to you earlier that what was negotiated and agreed upon.

structured settlement cash

As always there is a loophole to this law as well as selling structured settlements is becoming more and more popular these days. People may sell their settlements for various reasons mainly being the requirement of a lump sum of money. This sale of a settlement may mostly be used to pay off a debt or to help pay for college tuition of their child/children. This sale of a structured settlement payment rights is called structured settlement factoring transaction. There are certain purchasers of structures settlements mostly companies which buy part or all of a settlement from a person and pay them a lump sum of money which is not equal to the remaining amount of settlement. Most people however do not sell their structured settlements because they require and depend upon this periodic influx of money to run their households.

How to choose the right structured settlement factoring company

Certain individuals do not depend upon the future periodic payments offered by the structured settlements. Others may require a sudden influx of cash. They decide to sell their structured settlement payment rights and have to choose a structured settlement factoring company. These companies draw up an agreement and buy off the settlement. Then they offer a lump sum of cash to the individual. However any sale of this sort will require approval by a court judge for compliance to local rules.

Choosing the right company to sell your structured settlements is very important. Do not sell your payment rights to companies that make you sell but does not listen to your queries or concerns. Some companies who are leaders in this field talk to you about the benefits and disadvantages and help you make a decision. Here are some companies who are at the top of their field:

  1. JG Wentworth: This company is one of the top firms in this field and they offer some unique options. They help you in getting payment as soon as possible and even help in getting pre-settlement funding so that you have adequate money till your case is settled. They also help customers in selling their annuity payments in part for unforeseen expenditures.
  2. Olive Branch Funding: This company has a unique understanding of the future payment purchasing industry and can respond to your needs better. They pride themselves on being a customer friendly company. The customers can take advantage of the company’s help and talk with their representatives.
  3. Seneca One: Having a personalized approach to its customers needs is the strong point of this company. They build an understanding of the customers’ problems one at a time with representatives who talk to each customer. They also have a BBBA+ rating that shows that they excel in customer service.

This article will help you decide what to do with your structured settlements if you have any and what to look for in companies that offer to buy your payment rights.

Banking Solution For Billionaires From Credit Suisse

by Mike Henderson

The exit of Credit Suisse Group AG (CSGN.S) from the U.S private wealth business last year must have raised quite a few eyebrows. However, this was followed by a new investing banking group plan which was basically targeted and focused towards billionaires.

The bank has understood that there is a big potential when it comes to meeting the financial needs and requirements of billionaires. Keeping this in mind, it has hired the services of Charlie Buckley. He belongs to the UBS group which is a competitor for the bank and was handpicked by the founders and he would be working closely with them. This has been revealed from an internal communication with Reuters. It would be pertinent to mention that Buckley is no fresher and carries with him rich experience in UBS and his ability to strike a business cord with the rich and wealthy individuals and groups is well known.

There is a slightly different model which will be dished out to these wealthy individuals. Instead of taking care of the wealth planning needs as it the case conventionally, Charlie Buckley and this team will focus more on the asset business and the lending requirements of these ultra rich groups of people. The focus will be more on M&A advice, pure lending and advices and tips pertaining to capital markets. The focus will be mostly on rich individuals and families and they will also try and rope in business individuals and entities that are successful in the field of telecommunications, biotechnology and oil and gas. The stakes could be worth quite a few hundreds of millions of dollars.

The model that is being planned will be to enter into a working relationship with the CEO of a private technology company. As and when the entrepreneurs are ready to expand their business by going public or if they want to sell the business, this concern will introduce UBS to the CEO of such company. Charlie Buckley and his team will take the matter forward. The team will mostly be of individuals who take care of stock offering and M&A related matters. They are also looking into the market of buying annuities despite the strict regulations.

The latest move is a part of a well-thought out strategy by which Credit Suisse will not only bring down levels of trading businesses in U.S.A but also focus their energy on wealth management in Asia and other emerging economies around the world. The objectives and goals are quite clear. Credit Suisse will try and strengthen the investment bank and also the wealth management unit. This was a part of the plan which was decided in the strategic review meet held last October.

The objective of Credit Suisse is also to stop being in businesses which require big capital. It also is trying to be away from business which does not have the scale to be competitive. The U.S Wealth Management business is one such example. As a move to get things started in the right earnest, Wells Fargo & Co entered into an agreement with Credit Suisse to have the license to recruit brokers in U.S who are associated with the Zurich-based bank.

This new strategy is in line with an increasing trend to offer different types of financial and investment services to the ultra-rich. This segment is becoming one of the fastest growing segments of households. It would be pertinent to mention here that the United States tops the list of millionaire households. However, in terms of numbers the biggest chunk is expected to come from Asia and this has been confirmed by research studies of Boston Consulting Group.

This new effort has been possible because the bank has posted quality profit for the second quarter and this has strengthened the hands of Thiam’s in his effort to give a new direction and also to restructure the bank and its operations.