October 12, 2011, The Decumulation Beat
The Scoop on Pre-Owned Annuities
When buying a secondary-market annuity that offers a 7% or 8% effective rate of return, make sure you deal with honest brokers.
A financial planner friend of mine e-mailed me a long list of pre-owned annuities that he was excited about. No wonder. The effective rates of return were as high as 8%.
You may or may not be acquainted with pre-owned annuities. These are contracts that were purchased from a highly rated insurance company as part of a structured settlement.
Typically, the original owner won a damage suit—product liability, medical malpractice, industrial accident, etc.—and the damages were paid, in full or in part, with an annuity.
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