It’s a time to be thankful! We’d like to show our appreciation for everyone out there who, like us, is focused on crafting the best solution to our clients’ needs. Moreover, the season demands we take the time to acknowledge a few things. First, and the hard work NSSTA has done to ensure greater fairness in the factoring process. Work in Georgia and Florida to ensure aggressive poaching has been nullified is commendable and should be the standard everywhere. Likewise, a tip of the hat to Texas, whose personal identifying information (PII) protections guarantees that annuitants don’t get harassed ad nauseum from the moment the ink dries on their structured settlement agreements or when they’ve made the decision to cash something out. We’d also like to thank the work of those who go unrecognized too often: the IPAs who help both us and the courts with guaranteeing that our more vulnerable annuitants get the proper added input and security. It’s not required in all states, but we’re sure to use them as often as we can. The best consultation doesn’t just come from us, and we know plenty of clients need that added layer of protection to feel comfortable. Where some may try to lead annuitants away, knowing full well that the deal is a result of their aggressive telemarketing or clever jingles, we know we can trust you and your referrals. They wouldn’t be doing this unless they needed to. Finally, we give thanks to you. Enjoy the turkey, good company, and inevitable food coma. 

“Happy Halloween!”

Myth: You will lose money by factoring, so take out a loan instead. Reality: Whether you factor annuity payments or take a loan, there is a cost to obtaining money, but many people believe that factoring involves “losing” money. This misconception comes from comparing the cumulative future payments with the present value lump sum payment offered by the factoring company. For instance, if an annuitant has 200 monthly payments of $1,000 , the cumulative payments would be $200,000 . In this case, a factoring transaction might net the annuitant approximately $100,000 or 50% of the cumulative total. This is not “losing” money, it is the result of obtaining future payments early at a 10% discount rate. If instead the annuitant took a $100,000 loan at 10% and paid it back over 200 months , the total cost including interest would also be $200,000 (assuming the annuitant had sufficient credit to get the loan). A loan requires credit, collateral, origination fees, and carries the risk of late fees and foreclosure if payments are not made when due. In the factoring scenario, the annuitant would need to wait 200 months (almost 17 years) to collect the full $200,000 , during which time the equivalent present value of the payments is continually diminishing due to inflation. A dollar will not have the same purchasing power in 17 years as it has today.