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June 11, 2012

Allstate Structured Settlements Lowers AFEN Discount Rate to 8%

by John Darer® CLU ChFC MSSC RSP CLTC

Allstate Life Insurance Company has taken a leadership position in the battle against high teen structured settlement factoring discount rates by lowering the discount rate it charges its structured settlement annuitants for the liquidity feature, to 8%. It had been 11% since the inception of the AFEN rider (AFEN is the acronym for "Advanced Funding Exchange Notice")

AFEN offers an alternative to holders of structured settlement payment rights who may later need liquidity, that has not been officially adopted by other companies to date (except perhaps Symetra which essentially owns its own in-house factoring company, Clearscape Funding).

The AFEN is available to Allstate structured settlement annuitants with a structured settlement that is funded through either Allstate Life Insurance Company or Allstate Life Insurance Company of New York. If you are receiving structured settlement payments from Allstate, don't run to the funny ads (or the funny pages). Call Allstate's AFEN unit first! Any competing offer will have to have a discount rate better than 8%.

The move is smart one for Allstate because it improves their product. It is also smart branding. A number of structured settlement annuity issuers lose branding and customer contact to servicing agreements. Servicing agreements occur when an annuitant only wants to sell part of their structured settlement payment rights and the annuity issuer will not split (dice) payments.  For an industry that is concerned about losing its branding to structured settlement factoring companies, I'm surprised more companies are not openly offering a similar liquidity feature.

This is not the end of the world for structured settlement factoring companies by any means because (1) there are current structured settlement annuity issuers who have yet to provide an AFEN-like feature (2) there is a universe of structured settlement payment rights written by insurers who no longer write them. Perhaps it's a shot across the bow.

Related posts on the subject

Commutations and Structured Settlements November 22, 2011

 

 

Posted at 05:11 PM in Albany New York Structured Settlements, Allstate International Assignments Ltd.NQA, Allstate Structured Settlements and Structured Payment Solutions, Bowling Green Kentucky Structured Settlements, Bronx New York Structured Settlements, Brooklyn New York Structured Settlements, Detroit Michigan Structured Settlements, Hartford CT Structured Settlements, IRC 5891 Structured Settlement Factoring Transaction, Lexington KY Structured Settlements, Long Island NY Structured Settlements, Los Angeles CA Structured Settlements, Missouri Structured Settlements, NC Structured Settlements, New Jersey Structured Settlements, New Orleans Louisiana Structured Settlements, New York Personal Injury, New York Structured Settlements, Newburgh Structured Settlements, NH structured settlements, NJ Structured Settlements, North Carolina Structured Settlements, NYC Structured Settlements, Palm Beach Structured Settlements, Philadelphia PA Structured Settlements, Rhode Island Structured Settlements, Rochester Structured Settlements, Sacramento Structured Settlements, San Francisco Structured Settlements, Santa Monica Structured Settlements, Sarasota Structured Settlements, Settlements in Queens County New York, South Carolina Structured Settlements, St. Louis Structured Settlements, Structured Annuity Issuer, Structured Settlement Factoring, Structured Settlement Payment Rights, Structured Settlement Transfers, Structured Settlements in Florida, Structured Settlements in Illinois, Structured Settlements in Ithaca New York area, Structured Settlements in Kentucky, Structured Settlements in Louisiana, Structured Settlements in Maryland, Structured Settlements in Michigan, Structured Settlements in Nassau County, NY, Syracuse Structured Settlements, TX structured settlements, White Plains Structured Settlements, WV Structured Settlements |

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