What is a Certified Pre-Owned Annuity™?
Posted on October 16, 2013
Have you heard of a Certified Pre-Owned Annuity™ but are not really sure what it really is?
A Certified Pre-Owned Annuity™ is a contract that is issued by an insurance carrier, as part of a structured settlement. This contract guarantees the holder payments from the annuity over a fixed amount of time at a fixed rate of interest.
The interest rate is determined by several factors, including current market conditions, term, carrier rating, and buyer acceptance.
Certified Pre-Owned Annuities™, as the name implies, have already been owned by someone else. This means that the payment term, payment amounts and average life are set and cannot be changed. In return for this lack of flexibility, a Certified Pre-Owned Annuity™ comes with higher returns.
A Certified Pre-Owned Annuity™ is a great investment choice if you have a conservative mindset. Since the money is invested by large, well rated insurance carriers, you will find that those monies are often found in government securities and high grade corporate bonds with strong guaranteed interest rates. Your annuity will also provide above average returns when compared to the fixed income portion of your portfolio.
A Certified Pre-Owned Annuity™ must be held to term and should not be considered a liquid investment.