anyone familiar with SMIA's?

[bentley]

recently chatted with an investment advisor who suggested that I take a hard look at SMIA's. (secondary market income annuitiy). This is where they buy annuitized settlements for cash, and then resell them as an annuity.

The rates are typically 2% higher than a spia, and must be approved by the court that handled the original settlement.

At least, that's how I understand it

Has anyone else looked at these?

B

 

[MasterBlaster]

tell your advisor... yeah these are really good..... For your commissions.

here is a link to a WSJ article on them. Buyer beware.

A Yield of Dreams That Really Isn't - WSJ.com

First is the lack of liquidity. Imagine you expect to hold one of these annuities for 20 years. Then tomorrow, without warning, you face a medical emergency and urgently need to cash in your principal. There is no tertiary market for a secondary-market annuity; the firm that sold it to you usually will not buy it back. Furthermore, the fine print of the original court order entitling you to the payment stream may forbid you from ever selling it to anyone else, says Michael Miller, who specializes in structured settlements at Drinker Biddle & Reath in Philadelphia.
A less obvious but more ominous risk is that you could lose your rights to receive the income. Last July, a federal-court judge in Dallas ruled that a factoring company that had purchased an income stream from a personal-injury claimant had no right to retain or resell it, because she had already sold the same payments to another factoring firm five years earlier.

here's another article.

http://www.investmentnews.com/article/20100228/REG/302289992

There are many more just google the topic