Thinking outside of the box, the reality is that at this point in time interest rates make a very short duration structured annuity an unattractive option. Back in the day a structure over the next 4 years meant you might have actually got some rate of return. Today you might even have a negative return!. All you have to do is to take a look at short term bond rates. Insurers must certify and asset liability match to every state's insurance commissioner that they are admitted in. What's out there?
If you have good rated age and you accept a structured settlement with an early start date coupled with a long guarantee period, the leverage of the rated age is reduced. Is there a potentially better solution?
Suppose instead you wrote a traditional structure with a deferred start date, having previously done your homework to determine that there is an inforce structured settlement opportunity available, with cash flows that "fill the gap" up to the point that the traditional structured settlement payments begin. Do you think you would be able to get more benefits? Good chance you might.
Much is made of the tax free status of structured settlements and that's a good thing as well as a strong selling point. Yet for the annuitant that has a significant amount of offsetting deductions the taxable effect of the in force structured settlement payment rights purchase will be mitigated. Even without medical deductions what is the after tax return on 6-7% and how does that compare to the short term alternatives. Is it at least worthy of analysis?
In force structured settlement payment rights are assigned by Court Ordered transfers and payments come from many of the same insurers who write structured settlements as well as a potentially wider universe of other insurers. Astute financial advisers are competing with structured settlement brokers in some geographic areas.
Settlement professionals, particularly those who hold themselves out as a "fiduciary" should gain a better understanding of this market, its risks and rewards for clients.