Secondary Market Annuities
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Risk Assessment & Underwriting

Are Secondary Market Annuities Risky?

planning 300x199 Risk AssessmentUnlike other investment strategies, secondary market annuities are secure & backed by highly-rated life insurance companies [or state lottery commissions], offering you greatly reduced risk without sacrificing yield.

Best of all, structured settlement annuities are contractually promised, not projections, so the rate you lock in is the rate you keep, even through stormy economic seas.

Of course, diversification is the best strategy, and though uncertainty can create opportunity, purchasing secondary market annuities offer balance and will help your portfolio mitigate risk.

We’ve built a level of trust and confidence among our clients that we believe is unrivaled by our competitors. Over 90% of our client base still consists from repeat business and existing client referrals.

Our secondary market annuities are handled by specially-licensed brokers who perform careful inspection of assets to ensure they’ve been taken great care of.

Our investment philosophy is reduced risk. As founder Thomas Hamlin says, “I only work with relative plans, meaning plans that most representatives would only sell to their relatives (and maybe not even then).”

Our secondary market offerings are no different: Well-respected outside counsel reviews the factoring process independently of us, to assure all your investments are protected.

That said, secondary market annuities are not risk-free and investors should heavily research to ensure the health and viability of their investments.

buysmas Risk Assessment

What are the Risks?

  • SMAs must be backed by a financially stable insurance company that issued the annuity. It is important that the insurance company is able to make the annuity payments.
  • The terms of the court that approves the sale of the payments must comply with the laws that apply to the transfer of structured settlement payments. If not, a an excise tax could be assessed.
  • The originator must have complied with all federal and state laws applicable to the sale of structured settlement payments. If not, the transaction could be unwound with a potential loss of purchased payments.
  • SMAs are not deposits and are not insured by the Federal Deposit Insurance Corporation (FDIC) or any other federal government agency.
  • SMAs are subject to interest rate risk. Market interest rates may rise while the rate of return on the secondary market annuity is locked in. One method of hedging interest rate risk is to build an annuity ladder by buying a series of secondary market annuities over an extended period of time.
  • SMAs typically must be held to term and are not liquid purchases.
  • SEC, FINRA Issue Investor Alert On Pension or Settlement Income Streams: Click Here To Read More
  • Investor Bulletin: Pension or settlement Income streams: Click Here To Read More

Our Unrivaled Due Diligence Process

Safe as any other annuity-related investment, risk comes from transfer-court order process, and we take great pride in our due diligence process to ensure your investments are protected and handled with great care.

To help perform these inspections fairly and thoroughly, we enlist the help of independent legal counsel, unaffiliated with either the originator or the insurer.

If you’re familiar with the risks and are ready to invest, click here.

buysmas Risk Assessment

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No Longer Taking Reservations

Our Clients Say:

“Somerset you are the BEST! I went from earning 1.5% to 2% on CDs to 6% and 6.50% with New York Life and Metlife SMAs!" -Maryanne M., Illinois

“I was about to give up hope of ever being able to achieve a decent rate on the fixed portion my portfolio, until I discovered Secondary Market Annuities and Somerset. After doing thorough research, I decided to go through Somerset because of their process, knowledge, professionalism and the fact that they require outside attorneys to review every transaction at no additional charge to me.” -Ed M. Maryland

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Somerset Wealth Strategies, Retirement Planning Service, Portland, OR