Should You Sell Your AIG Structured Settlement Annuity Payments?
The confidence of AIG’s structured settlement annuity policy holders has been shaken, but should these policy holders sell the rights to their annuity payments?
Due to the circumstances surrounding the recent events of AIG’s financial difficulties the media has spawned a frenzy among policy holders. This author believes annuitants should be cautious about selling the rights to their annuity payments. Here is why:
- Annuitants are guaranteed $100,000 of the present value of the annuity contract (most states) by their state guaranty fund. Click here for a chart of Life Insurance State Guaranty Laws & Provisions
- As seen in the Executive Life of New York impairment, annuitants received 100% of their payments
- At this current time, annuitants selling the rights to their AIG annuity will receive higher rates than normal due to the uncertain future of the company.
Comments:
What is the rate that the present value of an annuity is calculated at? Most likely the Guaranty Association will decide this if ever needed.
What is the future for AIG?
The Fed now has a major role in AIG’s operations — it essentially named a new chief executive, Edward Liddy, and owns nearly 80 percent of the company’s stock.
The government is widely expected to sell off AIG’s assets to get its money back, rather than aggressively pursue new business, because the United States’ main priority is to get its money back, rather than to maximize profit for shareholders.
Will AIG’s life and annuity division be sold off? We will wait and see.
Well this really is unsettleing for me, I have an incapicated son and am involved with an annuity from a settlement that is worth millions of dollars, and I see the States guarentee a 100,000, what is that going to do.
What I want to know is, are we safe now that the feds stepped in?
They wont let it go under now that they have 85 billion invested?
Also it is determined that AIG has plenty of assets to pay back the feds and recover. I can never get a difinitive answer and it is very frustrating.
If I were you, I would contact a financial planner and decide what is best for you and your family.
If there is no immediate need of money, then I would keep your annuity.
Also, if you would like to find out what we could do with a buyout of your annuity feel free to give us a call at 888-665-1257.
Thanks.
Sorry, I neglected to answer your questions in my previous comment:
There shouldn’t be a problem with AIG in the next 2 years, unless they start selling on subsidiaries.
There is no way of knowing how they will pay back the feds.
My concern is long term with AIG, my annuity is a fixed amount of payments for 40 years, so I would like reassurance that 10 years from now we will be recieving payments ok.
There is a lot of misinformation and misinterpreted information out there. In a departure from the hyena like behavior exhibited by others in his industry Mr Cravenho has tried to to do the honorable thing from the factoring end of things. There is plenty of legitimate information in the structured settlements/settlement planning space.
You may find my post “Understanding the AIG Rescue Plan 101″ to be helpful as it includes definitions, industry specific commentary and useful links.
http://structuredsettlements.typepad.com/structured_settlements_4r/2008/08/a-rose-by-any-o.html
You may also find it helpful to refer to the NAIC website at http://www.naic.org
Further to the above comment #5, this is the correct link
http://structuredsettlements.typepad.com/structured_settlements_4r/2008/09/understanding-t.html
Actually we feel much better now abut AIG, and I have researched this issue extensively.
Thanks for the above links as well. You could never beat the tax free payments from a structured settlement, so I don’t believe we would ever sell the annuity, we were just shaken a bit with the events that had unfolded a week ago.
I believe that the insurance division is fine and well at AIG and the structured settlement division is safe and sound, and could never be raided by the parent company anyway, because the insurance division is tightly regulated.
Also it is important to note that the structured settlement division is a third party company from AIG, and is a subsidiary of the life insurance company.
Jack,
I am glad that you feel comfortable again with AIG.
I would like to clarify one point. I am not recommending in anyway that you should sell your annuity, but if you did decide to sell your annuity the lump sum would be tax free as well.
My mother is in an assisted living facility and the bulk of her
assets are in an annuity with AIG. The balance is around $250,000.
From what I am reading there is a guaranty for amounts to $100,000.
Do we need to restructure this annuity into two/three accounts and
can that be done? Otherwise is the $$ safe? This is her retirement
and we cannot afford for her to lose it! Comments please.