When I Sell an Annuity Settlement, Who Should I Choose as Servicer?

When people sell annuity settlement payments, some people sell their entire structured settlement and receive a lump sum of cash which closes out the entire structured settlement as far as they are concerned; the purchasing company now receives all future payments. However, other people may choose to sell annuity settlement payments in part, keeping some for the future – this is a wise move for many people. This means that the payments from the insurance company who pays the annuity have to be split up between the original annuitant and the new buyer.
To accomplish this, most of the time, Strategic Capital will work with the insurance company who pays your annuity and has them split the payments, sending part of them to Strategic Capital and part of them to you, in accordance with the sale agreement.

However, some insurance companies will not agree to split payments between Strategic Capital and you, which means that we must employ a servicing company. It is important for you to know what this company does and how choosing this company can impact your financial security.

What Servicing Means when you Sell Annuity Settlement Payments

Let’s say that you are getting $1,000 a month. Then, you sold half of that payment with an agreement that you get $500 a month and the company that bought your payments gets $500 a month for some designated amount of time. If the insurance company is willing to split the payment then they will send $500 to you and $500 to the purchasing company. However, if they will not split the payment then the agreement will include using a servicing company who will split the payment. The payments can be serviced either by a professional servicing company or by the buyer itself.
Beware of the Buyer when You Sell Annuity Settlement Payments

If the company that you are dealing with (the one buying part of your payments) insists on servicing the payments itself then you should be careful, because, if that company has financial struggles in the future it could mean a delay in you receiving your payments. In fact, if that company later files bankruptcy, it may even mean that your payments may be caught up in the bankruptcy and that you could lose all of the payments that you didn’t sell. It’s a potentially dangerous situation.
Demand a Servicing Company when you Sell Annuity Settlement Payments

At Strategic Capital, we pay an independent professional third party to service the payments, so that your financial future is not tied to ours. Sure, we are one of the largest financiers in the private cash flow market; we have bought over 1.5 billion dollars worth of payments. But while we intend to be around to serve for decades to come, your best decision is still to keep your own future separate from that of the company that you sell annuity settlement payments to. What this means is that the independent servicing company receives the whole payment from the insurance company. They divide it up, sending Strategic Capital its part of the payment and sending you your part of the payment, the payments that you didn’t sell. In this way you are completely protected. Your money stays protected and your financial security is assured. Oh, and the best part – Strategic Capital pays all of the fees associated with the servicing company, so it doesn’t cost you a cent.

Published : April 25, 2013

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