How conservative investors build predictable, contract-backed cash flow — and exactly what to look for before they buy. No hype. Just what a careful buyer needs.
For years, careful savers have faced the same frustrating choice. On one side: CDs, savings accounts, and Treasuries — safe and familiar, but often paying yields that barely keep pace with inflation. On the other: the stock market — higher potential returns, but with swings that can wipe out years of progress right when you can least afford it.
For retirees and conservative investors, neither feels right. You spent decades building what you have. The goal now isn’t to gamble with it — it’s to turn it into reliable income you can count on, without losing sleep over the next headline.
A Secondary Market Annuity income stream sits in the space between those two extremes: a defined schedule of guaranteed fixed payments, set by contract and approved by a court, backed by an established insurance company. Predictable like a CD — but historically at higher effective yields for a comparable holding period.
It begins with a structured settlement. When someone receives a legal settlement — often from a personal injury or insurance claim — the money is frequently paid out over time instead of in one lump sum. To do this, a highly rated life insurance company issues an annuity that pays the recipient a fixed schedule of payments, such as a set amount every month for 20 years, or a series of future lump-sum payments on specific dates.
For MJ Settlements offerings, those payments are non-life-contingent — they don’t depend on anyone’s lifespan. The amounts and dates are guaranteed by contract and don’t move with interest rates, markets, or the economy. They are legally binding obligations of the issuing insurance company.
Where an investor comes in: sometimes the original recipient would rather have money today than wait years for future payments. Through a court-supervised process, they can sell some or all of those future payments at a discount, and a judge reviews and approves the transfer. When you purchase the stream, you’re buying the right to receive those remaining fixed payments — paid by the same carrier, on the same schedule, now directed to you. You pay a discounted price today in exchange for the larger total received over time. That discount is your effective yield.
You buy a court-approved right to a fixed, non-life-contingent stream of insurance-company payments at a discount — trading a lump sum today for a known, larger total paid out on a set schedule.
Each one lists its payment schedule, term, purchase price, effective yield, and issuing carrier — so you can compare the details before a conversation begins.
Term and income are matched to your timeline — monthly income, future lump-sum payments, or a blend of both.
Structured settlement transfers are reviewed under state law. A judge confirms the assignment before it becomes final.
Your purchase is completed and the right to the payments is formally redirected to you, with the issuing carrier acknowledging the change.
Payments arrive on the contracted dates for the life of the stream — the predictable cash flow you purchased.
Court approval is a feature, not a formality. It’s a layer of legal review that confirms the transfer is valid and properly documented — protection most alternative income products simply don’t have.
This does not mean risk-free. It means the schedule is predictable. The value is certainty of schedule and the strength of the carrier behind it — not a promise that nothing can ever go wrong. The risks are spelled out in full below.
Every listing is laid out the same way. Here’s what each number means — and why it matters.
When you buy a Secondary Market Annuity income stream, you’re ultimately relying on the issuing insurer’s ability to keep paying. That’s why we show the carrier — and its independent financial-strength rating — on every offering.
| Agency | Strongest → tier | What to know |
|---|---|---|
| AM Best | A++ / A+ → A / A− | The insurance-focused standard. “A” ratings signal excellent financial strength. |
| S&P | AAA → A− | “A” tier indicates strong security; below that, additional caution may be warranted. |
| Moody’s / Fitch | Aaa / AAA → A3 / A− | Used alongside the others for a fuller picture of an insurer. |
Don’t accept “highly rated” as a blanket label — on anyone’s website, including ours. Look at the specific carrier on the specific offering and its current rating, and weigh that against the price and term. A higher yield on a weaker carrier is not the same deal as a slightly lower yield on a stronger one. If a rating ever raises a question, ask — that’s exactly the conversation we want to have.
The right question isn’t “which is best?” but “which fits this portion of your portfolio and this purpose?”
| Feature | Bank CD | U.S. Treasury | SMA Income |
|---|---|---|---|
| Backed by | FDIC, to limits | U.S. government | Issuing insurance carrier |
| Typical yield | Lower | Lower to moderate | Historically higher* |
| Payments | Fixed | Fixed coupon | Fixed by contract |
| Defined term | Yes | Yes | Yes |
| Liquidity | Penalty to exit early | Liquid; sellable | Low — meant to hold |
| Market swings | None | Price moves if sold early | No change to schedule |
| Government backing | Yes | Yes | No |
*Comparing instruments of similar duration. Yields vary by offering and over time; higher yield reflects, in part, lower liquidity and the absence of government insurance.
You’re typically accepting lower liquidity and insurance-carrier backing instead of government backing. In exchange, these streams have historically offered a higher effective yield. Whether that’s right depends on your timeline and how much of your money needs to stay liquid — it’s rarely all-or-nothing. Many investors use these for the portion of their portfolio they won’t need to touch.
A guide that only sells isn’t a guide. Here’s what to weigh.
Built to be held to term. There’s no guaranteed resale market, so don’t commit money you may need quickly.
Payments depend on the issuing insurer’s ability to pay. That’s why the carrier and its rating matter on every offering.
Unlike a CD or Treasury, these aren’t FDIC- or SIPC-insured. State guaranty associations exist but have coverage limits.
A fixed cash-flow instrument, not a growth play. You collect the scheduled payments — nothing more, nothing less.
Fixed payments don’t rise with inflation unless the stream includes a cost-of-living adjustment (COLA). On longer streams, factor in future purchasing power.
Value rests on a valid, court-approved transfer and a properly documented chain of title. Insist on it — we do.
If an offer sounds too good, slow down and look at the carrier and the paperwork. The most prudent investors treat the backing and documentation as seriously as the yield. We’d rather earn a long relationship than rush a single sale.
You may have heard structured settlement payments are tax-free. That’s true for the original injured party under federal law, but it generally does not carry over to an investor who later purchases the stream. As a buyer, expect income from these payments to be taxable; the treatment depends on the specifics of the transaction.
Don’t buy on the assumption of tax-free income. Plan for it to be taxable, and confirm the treatment for your situation with your own tax advisor before you commit. We’re glad to provide the documentation they’ll need.
MJ Settlements is Todd Lesk’s firm — built over more than two decades in fixed-income settlements on a simple belief: financial decisions should be simple, conservative, and personal. Many of his clients have been with him for years, treated like family. To us, no one is a transaction. Everyone has a name and a story.
Inventory and yields change as deals come and go. The clearest way to understand your options is to review live offerings and ask questions.
This guide is provided for general educational purposes only. It is not an offer to sell or a solicitation of an offer to buy any security or financial product, and it is not investment, tax, or legal advice. Examples and figures are illustrative only and do not represent any specific offering, return, or result.
Secondary Market Annuity payment streams are not bank deposits and are not insured by the FDIC, SIPC, or any government agency. Payments depend on the claims-paying ability of the issuing insurance carrier; carrier financial-strength ratings are opinions of third-party agencies, can change, and are not guarantees. These instruments generally have limited liquidity and are intended to be held to term. Availability, pricing, and yields change frequently and are not guaranteed. Income to a purchaser is generally taxable; consult your own tax advisor. Depending on structure and jurisdiction, these transactions may be subject to securities or other regulation and suitability considerations. Consult your own financial, tax, and legal advisors before making any decision.
MJ Settlements, Inc. · MJSettlements.com · 888-363-5252 · Coral Springs, Florida