For investors
How buying a secondary market annuity works
You buy an existing set of structured settlement payment rights for less than the sum of their scheduled payments, then collect the difference as your estimated yield. No new annuity is issued. You can ask our team questions and review every document before you decide. Here is exactly how each of the five steps works.
How it works, with help at every step
You are never on your own. From your first question to your first payment, our team walks you through each step, and you can review every document before you decide. Here is the sequence, start to finish.
Review available income options
Start with the available income options. Each one lays out its estimated yield, purchase price, total scheduled payments, payment dates, issuing carrier, and whether it is guaranteed or life-contingent, so you can see the full picture before you decide anything.
Ask questions and review the schedule
Take your time. Our team will walk you through the full payment schedule, who the issuing carrier is, and the risks, and answer any question you have. Nothing here is a new annuity being issued: you are stepping into existing payment rights transferred through a court-approved process.
Reserve the option you want
When an option fits, reserve it by its contract number. There is only one of each, and reservations are first come, first served, so a reservation holds it at its quoted terms while the paperwork is prepared.
Complete documents and funding
A court reviews and approves the transfer under the applicable Structured Settlement Protection Act, the right to receive the payments is assigned to you, and you fund the purchase. We coordinate the documents end to end, so there is no underwriting on you and no medical questionnaire.
Receive scheduled payments
From then on, the scheduled payments come to you on their contractual dates, for the life of the stream. The amounts and dates were fixed in the original settlement, so you know the full total before you commit. Many investors ladder several streams to build a predictable income schedule over time.
Why it holds up
Built on a court order, not a promise
What makes a secondary market annuity defensible is the structure behind it. The payments already exist, a court signs off on moving them to you, and a top-rated carrier remains on the hook to pay.
Court-ordered transfer
Every stream changes hands under a court order, reviewed against the state's Structured Settlement Protection Act. The assignment is a matter of public record, not a handshake.
Top-rated carriers stand behind it
The payments are obligations of highly rated insurers, including Berkshire Hathaway, American General, New York Life, MetLife and peers. You see exactly who backs a stream before you reserve it.
No defaults in placed inventory
Historically, the payment streams PSA has placed have paid as scheduled with no carrier defaults. Past performance does not guarantee future results, but the track record reflects the quality of the underlying obligations.
Know the risks before you buy
These are long-term, fixed-income holdings, not a savings account. A clear-eyed view of the trade-offs is part of investing well.
Limited liquidity
A secondary market annuity is a long-term holding with limited liquidity. There is no daily market, though we can assist with a resale or reassignment to another buyer if you need to exit, at a price that is not guaranteed. Plan to commit capital you will not need back on short notice.
Long time horizon
Many streams run for years or decades. The yield is earned over the full term, so these suit long-dated income goals rather than short-term cash needs.
Not FDIC-insured or a security
These holdings are not FDIC-insured, not bank-guaranteed, and not registered securities. Your protection is the carrier's financial strength and the court-approved assignment.
Life-contingent mortality risk
Life-contingent streams pay only while the original annuitant lives. They yield more for that reason, but payments can stop early if the annuitant passes. Guaranteed-category streams do not carry this risk.
Why an SMA vs. a new annuity
Same carriers, higher estimated yield
A newly issued annuity is priced at the carrier's current book rate. A secondary market annuity is an existing stream from the same class of carriers, bought at a discount on the secondary market, so the estimated yield runs higher for a comparable obligation.
Swipe sideways for the full table →
| Feature | Secondary market annuity | New (primary) annuity |
|---|---|---|
| Effective yield | ~4–7%, since you buy the stream at a discount | Typically lower, priced at the carrier's current book rate |
| Who backs the payments | Top-rated carriers (Berkshire Hathaway, New York Life, MetLife, and peers) | The single carrier you buy from |
| Payment certainty | Amounts and dates fixed in the original court-approved settlement | Fixed by the new contract you sign |
| How you access it | Reserve existing inventory by contract number, first come, first served | Underwritten and issued on demand |
| Liquidity | Limited; resale possible with our help, not guaranteed | Illiquid, surrender charges and penalties apply |
| Insurance / SEC status | Not FDIC-insured, not a registered security | Not FDIC-insured, not a registered security |
Estimated yields of roughly 4–7% are calculated at the time of purchase and are not guaranteed beyond the contractual payment stream.
The economics
What it costs, and who you buy from
- All-in pricing
- There are no separate fees to you as the buyer. Everything is priced into the estimated yield, so the yield and purchase price on a listing are what you get and pay. No commission, no application fee, no closing markup.
- Only pass-through charges
- The one exception is optional, and only if you choose it: a third-party servicer or a self-directed IRA custodian charges for its services, passed through at cost with no markup.
- A direct funder, not a broker
- Most of what we sell is originated by our affiliated funder, Catalina Structured Funding. Because we source, petition, and underwrite the file ourselves, we control the transaction and stay involved afterward, including to help resell or re-assign a stream. See what it costs and why we are not just a broker.
Important disclosure
Pacific Structured Assets, Inc. does not provide tax, legal, financial or accounting advice. The material on this website has been prepared for informational purposes only and is not intended to provide, and should not be relied on for, tax, legal, financial or accounting advice. You should consult your own tax, legal, financial or accounting advisors before engaging in any transaction, including the acquisition of factored structured settlement payments. Pacific Structured Assets is not registered with the Securities and Exchange Commission and is not licensed to sell insurance in any state.
Pacific Structured Assets
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