by Structured Settlement Watchdog®
Somerset Wealth Strategies claims to offer an annual payout rates of 75.5% and 25.17% on a Prudential recycled structured settlement and 31.16% and 42% on an AIG recycled structured settlement. Before you get crushed in the "stampede" to obtain structured settlement payment rights based on this misleading annual payout rate display, consider this:
To arrive at the 31.16%, Somerset Wealth Strategies has annualized the monthly payments due beginning March 1, 2035 and divided that by the amount you invest in 2015. [ $4,070.5 times 9 is $36,634.5; $36,634.5 divided by $117,702.51 equals 0.3112. I'll let the rounding go]
When you buy an income annuity or invest in structured settlement payment rights you are investing capital and getting back interest AND PRINCIPAL over time.
Your money is locked up until then. Somerset discloses that the Annual Rate for 3 payment streams is 5.5%. THAT is the rate of return for the use of your money over the term. What would be more appropriate, in my opinion, is to calculate the annual rate for each of the cash flows. The so-called annual payout rate is unnecessary deceptive marketing fluff.
Surely a company like Somerset Wealth Strategies, which has been marketing recycled structured settlements for years, can distribute its offerings to the public without resorting to what would surely not be allowed under securities laws or insurance laws if such regulations were in place instead of the regulatory "black hole" of structured settlement payment rights.
Read prior commentary about recycled structured settlements