Compared with prior years, total United States structured settlement annuity premium dropped sharply in 2011 to $4,974,710,838 according to a newly released report by Melissa Evola. Evola, President of Structured Financial Associates, Inc., has tracked structured settlement industry sales since 2002 based upon input from life insurance companies that participate in the structured settlement market.
The 2011 structured settlement annuity premium total represents an approximate 10 percent decline from 2010 and an approximate 20 percent decline from 2008. Evola's report further indicates 28,811 structured settlement annuities were sold during 2011 for an average per case premium of $172,667.
Based upon Evola's report, MetLife and Prudential Life were the leading structured settlement annuity providers in 2011. Their combined structured settlement premium of $2,119,300,000 represented approximately 43 percent of total 2011 U.S. structured settlement sales. According to Evola's report, 12 life insurance companies comprised the U.S. structured settlement market in 2011 compared with 22 companies in 2002.
Evola's report also tracks "non-qualified" structured settlement sales which are included in her total structured settlement premium figures. Structured settlements that are non-qualified [under IRC sections 130 and 104(a)(2)] are utilized to defer future payments from immediate income tax. Historic annual U.S. structured settlement annuity premium - as reported by Evola:
For estimated structured settlement annuity sales estimates from 1975-2011, see the structured settlement wiki which features estimates from the authors of "Structured Settlements and Periodic Payment Judgments" (S2P2J) based upon historical input from industry sources including Evola since 2002.
Many structured settlement industry participants attribute declining sales to low interest rates including future forecasts by the Federal Reserve. Although interest rates represent an important investment consideration, they impact all investment products not just structured settlement annuities. Regardless of interest rates, many other factors, such as mortality risk transfer and relative financial security, favor structured settlement annuities as the core settlement planning product for many personal physical injury victims. For additional information about structured settlement product suitability standards, see the structured settlement wiki.
Understanding the Structured Settlement Sales Process. The ads of singing people who "need money now" seem so joyful, you want to run right out and sell that structured settlement. The sale of a structured settlement is called a structured settlement factoring transaction. As a result of IRC 5891, every state now has laws governing the structured settlement sales process. If you're selling your structured settlement, it's important that you find your state's law regarding the process and become familiar with it. Your state's structured settlement process likely requires you to hire an attorney to get his advice, also. Be sure to hire an attorney of your own choosing who has experience in structured settlement sales. A structured settlement is intended to provide for your needs over a long period of time, so selling that settlement is not a decision to enter lightly.
Why Broker the Sale of Structured Settlement Payments? How 'bout brokerin' a few of them there structured settlements. The good ol' folks at Annuity Transfers, Ltd., a purchaser of structured settlement based annuities, are fixin' to help get you started!
Seriously folks, brokering cash flows presents an exciting financial opportunity. Which cash flow fits your personality and your approach to business? Lawsuit financing? Seller financed mortgages?
Since the cash flow consultant first deals directly with the seller, the consultant should know what makes the seller tick. As a purchaser of structured settlement annuity payments, Annuity Transfers, Ltd. recommends that you consider structured settlements. The brokering of structured settlements requires direct interaction with an individual whose personal financial interest is on the line. Structured settlements are legal agreements between plaintiffs and defendants that originate from personal injury claims. The resulting future payment stream may be sold pursuant to a regulated process. Brokers of these cash flows find motivated sellers, familiarize them with the legal process, and introduce them to motivated buyers. A company like Annuity Transfers, Ltd. purchases the cash flow at a discounted price.
What makes this cash flow purchase unique is the absolute legal requirement that the seller have a very good reason for selling his or her future payments. A judge must approve the transaction and determine that the overall agreement to sell future payments is structured in the seller's best interest. All state laws that regulate the process (there are currently 47 structured settlement transfer statutes) require that all interested parties, usually the insurance companies and beneficiaries to the annuity, be given the right to object to the payment transfer. There is an absolute priority associated with understanding why someone needs to sell structured settlement payments.
