In a recent article on DailyFinance.com on how to pay down debt when you’re retired, the author mentions 9 ways to do so including selling your home, refinancing your mortgage, waiting to retire or taking out a reverse mortgage. Surprisingly, they did not mention selling future payments from an annuity or life insurance policy.
If you own your home and have equity in it, then selling the home, refinancing the mortgage or taking a reverse mortgage may seem like the best option. However, many people do not have enough equity in their homes to pay off the debts as well as pay the fees associated with the transaction, especially for a reverse mortgage. Plus, who wants to go through the hassle of moving when you don’t need to.
If you’re looking to get out of debt and you have a life insurance policy or other illiquid asset, you do not have to postpone retirement, file bankruptcy (which also costs money) or sell your home. You can sell some of your future payments for a cash lump sum. With a cash lump sum payment, you can pay off your credit cards, medical bills, student loans, auto loans and other debts without incurring additional debt. In addition, there are no credit checks and selling your payments will not hurt your credit score like some of the other options mentioned.
If you have an insurance policy that you no longer need, there are a few options. You could cancel the policy so you don’t have to make additional payments or you can surrender the policy to the insurance company and get a little money back. The third option is to sell your life insurance policy to a company that purchases future payments. This is called a life settlement transaction and typically the amount you would receive from selling the policy is significantly larger than what you would receive from the surrender value of your policy.
When you try to cash in a single premium annuity from your insurance company it doesn’t take very long to realize that it is super expensive with the surrender charges and penalties. However, you still have the option of selling some or all of your future payments on the secondary market to a company like CBC Settlement Funding. CBC will pay you a lump sum cash payment today, in exchange for the rights to the future annuity payments. You avoid penalties and the rates are highly competitive.
If you are receiving periodic payments as the result of a lawsuit, you most likely have a structured settlement annuity. When you sell some of your future payment rights for a cash lump sum, you are transferring the rights to those future payments to a third party otherwise known as a factoring company. This is known as a Structured Settlement Transfer (SST) or structured settlement factoring transaction. This transaction is slightly different then selling a life insurance policy or a single premium retirement annuity because it requires court approval. This approval ensures that the transaction is in your best interest. So if you’re looking to sell some or all of your payments, you can rest assured that there are consumer protections in place to make your transaction go smoothly.
If you are looking to improve your financial situation and you need access to your future payments today, give CBC Settlement Funding a call at 877-386-3377. We can explain all your options including only selling a portion of your payments.
A: Unlike savings and checking accounts, your annuity is not insured by the FDIC, even if the annuity was purchased at a bank. If your annuity is with a top rated insurer that has an A+ rating you should be safe but sometimes insurers do become insolvent. Typically the policies are protected by the guaranty association in your state. Additionally, other insurance companies may directly inject funds to avoid or reduce reduction in scheduled benefit payments. This is what happened to Executive Life Insurance Company of New York which originally went into receivership in the early 1990s and determined additional shortfalls in 2007. In this case, Guaranty Association Benefits Company (GABC), a not-for-profit entity that was created to accept the obligations of the Executive Life Insurance Company of New York (ELNY) in liquidation. The GABC became responsible for making payments to payees and beneficiaries as of August 2013 and began making reduced benefits payments on November 18, 2013.
In addition, the ELNY Hardship fund was established by life insurance companies following the liquidation of ELNY. A $100 million fund was created to provide relief to 1,500 payees and beneficiaries whose benefits were decreased because of they liquidation.
The ELNY Hardship Fund is expected to begin making awards soon, according to industry insiders. The fund administrator, the Judicial Arbitration and Mediation Service (JAMS), will be sending letters by March 17, 2014, to applicants who successfully demonstrated financial hardship due to a reduction of benefits.
The hardship fund was established by life insurance companies following the liquidation of the Executive Life Insurance Company of New York (ELNY) in August 2013. The $100 million fund was created to provide relief to 1,500 payees and beneficiaries whose benefits were decreased. Eligible ELNY payees were mailed an application and contacted in other ways by JAMS.
According to the fund guidelines,
Recipients of the following categories of ELNY annuity payments will not be eligible for awards from the fund:
- Payments that have been redirected to investors (e.g. structured settlement factoring companies) or to creditors of parties entitled to receive those payments under a structured settlement agreement. Applicants whose contracts have been partially redirected will be considered, but the amount that was redirected may impact the allocation of available funds.
- Payments that an ELNY annuity payee can expect to recover from a property and casualty insurer or other annuity owner that remains obligated under a structured settlement agreement for amounts not paid by ELNY.
The ELNY Hardship Fund website states that the fund attempted to time its payments to the liquidation but were unable to do so because of the complexity of the fund and the regulatory process.
Questions about Hardship Fund awards should be addressed to the Hardship Fund: Toll-free information line at 888-809-2254 or www.elnyhardshipfund.com.
Guaranty Association Benefits Company (GABC), a not-for-profit insurance company created as a result of the Executive Life Insurance Company of New York (ELNY) liquidation, became responsible for making payments to payees and beneficiaries as of August 2013 and began making reduced benefits payments on November 18, 2013.
GABC annuity payments can be transferred and such transfers are regulated by the applicable Structured Settlement Protection Act. If you are interested in obtaining a free no obligation quote give CBC Settlement Funding a call today at 877-386-3377. We can explain all your options including only selling a portion of your payments.
According to Bloomberg.com, Guggenheim Partners LLC, Security Benefit Life Insurance Co., Guggenheim Life and Annuity Co. and Equitrust Life Insurance Co. were accused of fraud and racketeering in a lawsuit by annuity buyers filed in federal court yesterday.
In the complaint, plaintiffs Clarice Whitmore and Helga Maria Schulzki claim asset managers raided insurers’ cash reserves, threatening the security of the annuities they sold.
The women allege that Guggenheim acquired insurance companies and used them to sell annuity products that appeared to be safe while “funneling cash” to Guggenheim and associates. They also stated that the companies, “Engaged in a single racketeering enterprise that overcharged annuity purchasers.”
The plaintiffs are seeking class-action status and representation to anyone who bought an annuity from Security Benefit Life Insurance Co., Guggenheim Life and Annuity Co. or Equitrust Life Insurance Co. since
Jan. 1, 2010.
Doesn’t it always seem like things break right around the holidays, like your car or your hot water heater? It doesn’t really make the holidays seem bright when you’re not sure how you are going to pay for it all. To make matters worse, you don’t have a credit card so you’re running out of options.
At CBC Settlement Funding, we understand how hard things can be when you don’t have money to keep things going. It is downright depressing. All you want to do is pay off your debt, get back on your feet and save a little money for a rainy day…
Luckily, there are still some options available. If you’re receiving periodic payments from an annuity or structured settlement you can gain access to the cash you need today by selling some of your future payments. When you sell future payments for a lump sum payment, you won’t have to wait for your money to trickle in. You can use now and get back on your feet.
Maybe you’ve thought about selling your payments, but were worried because you have bad credit. No worries, there is no credit check. You also don’t have to worry about paying the money back because it isn’t a loan. You’re simply accessing tomorrow’s cash today.
Perhaps you’ve called other companies and didn’t like their offers or you weren’t impressed with their sales tactics. You owe it to yourself to call CBC Settlement Funding. We’re an “A” Rated, BBB Accredited business so we are committed to ethical business practices as well as superior customer service. Call us now at 877-386-3377 to receive your highly competitive, no obligation quote.