by John Darer CLU ChFC CSSC
If you need of structured settlement help or information about structured settlements then call in properly credentialed structured settlement professionals.
These days there are search engine optimization firms, certain factoring company affiliates and others without licensing credentials holding themselves out as structured settlement professionals or otherwise imply directly or indirectly that they are qualified to help you with structured settlement transactions or structured settlment information.
Check with your state's insurance department to see if the individual is licensed to sell annuities (or life/life insurance authority as it will show up on state licenses) Most insurance departments will not permit you to solicit insurance products (annuities) or even talk about them (creation or disposition) without an active license.
Heaven forbid someone starts talking about "structured settlement investments". If they do you may want to check with the FINRA [formerly the National Association of Securities Dealers (NASD)] to see if they have a securities license.
Some of the factoring companies (settlement payment purchasers) hold themselves out like this employing this disgraceful virtual cloak and dagger ploy when the goal is to get you to think about selling your structured settlement payments. That is what they are in business for after all.
Other companies make specious claims. One company, ironically called "Structured Settlement Investments, LP." employs fearmongering in claims on its website that by selling your structured settlement payments rights you are removing the risk of default of the qualified assignee or annuity issuer and implies that in doing so you are shifting the risk to Structured Settlement Investments LP. While the argument appears plausible, you are giving up an asset that may be of highest credit quality for a discounted lump sum.
Competitors of Structured Settlement Investments, Ltd. such as JG Wentworth and Peachtree Settlement Funding have advertised that they have a AAA credit ratings on securitizations backed by the very assets that they want to buy from you. AAA is the highest rating of credit quality given by Standard & Poors as well as Fitch. In other words third party companies who are in business to rate the credit quality of these assets give the companies holding them their highest rating. Highest ratings means least chance of default risk.
So lets examine this: they think default risk on a high quality AAA or even AA rated asset is a reason to sell your rights to tax free payments at a discount and put it… where? Under your mattress, in a CD or in an alternative investment? What is the credit quality of that alternative investment from Standard & Poors? Remember my point is not the issue of alternative investment choices. It is, in my opinion, the thought process framing Structured Settlement Investments, LP's marketing approach based on scaring someone who most likely needs a low risk financial vehicle, such as structured settlement, into trading a high quality asset at a discount so that they can invest less money (due to the discount and fees) in a potentially more risky investment, that reeks of snake oil.
One wonders how many seniors have been victimized by this type of approach and what state legislatures are doing about it?
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