Ready To Know How In-Force™ Fixed Term Annuity Payments Are Made?
Posted on August 14, 2013
Now that you have an understanding of what an In-Force™ Fixed Term Annuity is (from my previous blog) you probably are curious as to how payments would be made to you if you choose to do this.
In-Force™ Fixed Term Annuity payments may be paid directly to you by a U.S. based insurance company. If you purchase after the court transfer date has passed or in other cases where Bulbrook/Drislane deems it appropriate, the apportioned payments may be paid to you through a third party servicing company. No matter which way the payments are coming to you, the U.S. based insurance company is backing the payments and they have a credit rating that is generally AAA to A rated by Standard & Poor’s.
The rate of return for each In-Force™ Fixed Term Annuity is determined by the current market at the time which includes what you as the buyer is prepared to accept as a return on your purchase, and the In-Force™ Fixed Term Annuity attributes such as the number of years for the payout and the insurance company’s financial rating.
The rate of return for each In-Force™ Fixed Term Annuity is compounded monthly to generate an annual effective rate based on a 365 day year.
The rate of return on an In-Force™ Fixed Term Annuity is typically higher than the rate available on annuities newly purchased directly from insurance companies because an In-Force™ Fixed Term Annuity is transferred for the present value of future income payments. The present value is determined by what the Existing Annuitant (Seller), will accept and what a Buyer will pay.
The purchase and sale of structured settlement annuity payments is governed by state law and must be approved by a court which issues an order redirecting payments to you. A judge will review the proposed transfer to determine if it is in the best interest of the Existing Annuitant and then issue the court order.
For more information on how you can purchase an In-Force™ Fixed Term Annuity, contact us today!