Buying a STRUCTERED SETTLEMENT cash flow

[Tahoe Ray]

I just made a response based on the wording in your original post.

If FIAs have other ways to provide lifetime income besides a rider I apologize because I don't have knowledge of those products.

I do know the Income Rider FIAs I have purchased are different than the structured payment stream products offered by DCF. And the purchase customizations offered by DCF really allow a person to place both types of products in their retirement funds base obtaining the maximum benefit from each. This was discussed in the podcast.

My original post wasn't directed towards you.

SPIAs and DIAs are different than FIAs with income riders but I didn't (at the time) understand the reason for the original post. Hence my inclusion of that product.

I don't really care what was discussed in some podcast because I know this market VERY well and I am an expert in the distribution of assets. I have specialized in this market for over 20 years.

I wish you luck in whatever you end up doing.

 

[LostDollar]

My original post wasn't directed towards you.

SPIAs and DIAs are different than FIAs with income riders but I didn't (at the time) understand the reason for the original post. Hence my inclusion of that product.

I don't really care what was discussed in some podcast because I know this market VERY well and I am an expert in the distribution of assets. I have specialized in this market for over 20 years.

I wish you luck in whatever you end up doing.

Thank you for the comments.

I have deleted most of my posts above because I have discovered they were based on flawed understandings of SMA's.

 

[LostDollar]

If the beneficiary of a malpractice structured settlement award, that is currently paying out, wants to cash out, they have to go to court and get permission. Then, if they get it, they can sell their cash flow for a lump sum and the new owner gets the cash flow from the insurance company. Malpractice structured settlement money is tax free to the recipient. That tax free benefit goes with the settlement, if they sell it and you buy it. That is why I am interested in ONLY malpractice structured settlements.

DCF annuities, referred to in the podcast, has a tax information document that says purchasers of the rights to an income stream pay taxes on the income in excess of their cost.

 

[LostDollar]

You may indeed be correct. However, in most insurance or annuity policies bought by strangers/investors with no original insurable interest in the insured, the investor is taxed on the gains over & above what was invested to purchase the contract from the original owner. IE, if I pay $50k for a $250k life insurance policy & I collect $250k, I would owe capital gains on the $200k I made on it even though the original owners beneficiaries wouldn't have been taxed if they owned it.

Would love to see the tax code referenced where a malpractice award is tax free on all sums received even if it is sold to investors, hedge funds, private equity, etc

DCF annuities referred to in the podcast has a tax information document that says the gains over purchase price are usually taxed as ordinary income.

They show (without recommending) two different income calculation methods which the SMA purchaser can discuss with their tax advisor.

 

[LostDollar]

Why not just look at regular annuities (SPIAs, DIAs, FIAs w lifetime income, etc)?

You can look around for secondary market annuities (which may include structured settlements). Google should have results for that term.

They're like bonds where there is an inventory available. Payouts are all over the place. Are you insurance licensed? You still need to have an agent involved.

After doing some more reading about SMA's, I am confused as to why there would have to be an insurance agent involved in the sale of a structured payment contract since it is not an actual insurance product but merely a contract for a receivable.

 

[LostDollar]

Just to add that I did hear from LostDollar and I forwarded his email to my podcast co-host Curt Gibbs for follow-up and review. He's done quite a few of these while I got to play student in the podcast and just ask questions.

I don't know myself if this is appropriate for his situation or not. That's why I'm leaving it to them to determine. It may not, but better to find out than not.

Thank you for doing this for me.

After some online searching I have decided there is an underlying layer of possible risk to this product which I am unwilling to assume at this time. I have decided not to purchase an SMA right now. I have sent you an email explaining in more detail.