Liquidity can be provided by pairing the structured settlement with a settlement preservation trust, settlement conservation trust, or a special needs trust if there is a need to protect public benefits. The use of a "structured annuity backstop" is a strategy that facilitates a greater cash component and greater liquidity.
Caution About Structured Settlement Derivatives Mislabeled and Marketed to Investors , Including Injury Victims, as “ Secondary Market Annuities”, “SMA” or “SMIA”
An investment in structured settlement payment rights is not the same as buying an annuity. Don’t be fooled that the person selling it has an insurance license, is a settlement planner or financial planner who sells other annuities and calls it an annuity.
A Secondary Market Annuity
is not an annuity. The use of the expression ib marketing is improper terminology.
It is not an insurance product. It is not issued by an insurance company. It carries risks that are greater than a legitimate annuity. Some investors in secondary market annuities have lost all their money in a relatively short space of time. In a recent chilling example, on the advice of her Pittsburgh Financial adviser, Pennsylvania resident Linda Wall was sold a “secondary market annuity” for her retirement funds from a New Jersey Company called Altium Group in April 2012, which advertises “Secondary Market Annuities are considered by most to be high-yield, low-risk financial products.” Linda Wall’s January 26, 2017 Better Business Bureau review of Altium Group speaks for itself:
“I entered into a contract with Altium LLC in April of 2012 to buy a structured settlement for $152,833.37 with a return of $191,128.92. It was granted through the Florida court system then overturned because of fraud and our monies were never returned to us. Altium is now saying they are not insured and don't have those kinds of funds to return our money. My retirement savings are gone and they don't seem to think it is their problem. Be very wary”. For more information see Robert Wall and Linda Wall vs Corona Capital, LLC and Altium Group, LLC WD Pennsylvania Case No. 2:16-CV-01044-MRH, filed July 15, 2016.
Lawsuits against Access Funding have impacted investors in derivatives sold as secondary market annuities by various intermediaries. See more unsettling events on Secondary Market Annuities at Wikipedia.
Structured settlement annuities are regulated insurance products sold by license agents or brokers. Structured settlement payments are contractually guaranteed through customized (bespoke) structured annuities that we place with a multi-billion dollar life insurance company (or companies). If you have any doubts and think you can do better with your investments while minimizing risk, consider "Monte Carlo simulation" as an effective means to illustrate (to attorneys or plaintiffs) the volatility of investment returns with certain hypothetical investment mixes (on settlement proceeds) against the amount and timing of the plaintiff's absolute needs. It may be helpful to you.
Morningstar 2016, Morningstar data is unmanaged, reflects the reinvestment of dividends and capital gains, bears no management fees or operating expenses and is not available for direct investment.