How do Secondary Market Annuities Get Checked Out?
Posted on October 30, 2013
I’ve been telling you a lot about Secondary Market Annuities so that you can have the knowledge you need to decide if this is an option that may work for you and your family.
Today I want to touch on how the money is distributed and how these annuities are checked out when they are purchased.
Secondary market annuities provide multiple or single payment distributions over short or long term periods. The distributions are paid by the insurance companies to the new buyer in exactly the same way as they were to the original owners.
Rather than an investment, the transaction involves reassigning an insurance company obligation from the original owner (oftentimes the plaintiff in a damage suit) to the new purchaser.
Prior to purchase, a credit check and public records search of the seller must be done. There is a possibility when that happens that if the seller has child support obligations or a divorce agreement, there may be other claims against those future annuity payments.
The title search is similar to the title search for a house. The process is also similar to buying a house. The money goes in escrow, you (the buyer) receives a court order and other documents from the insurance company providing good title to the future annuity payments and the funds are released to the seller.