The Harbinger of Rising Rates?
Courtesy of EPS Settlements Group of Canada
– “The Structured Settlements Company”.
One thing that greatly influences the returns one receives when purchasing a structured settlement is the interest rate Life Insurers pay for long term bonds. As interest rates climb, purchasers of structured settlements can get a better monthly or yearly return.
Higher interest rates greatly helps our mutual clients protect themselves from economic uncertainty.
Over the last few years, there has been quite a bit of chatter dealing with the need for world central banks to increase the cost of borrowing. The major reason is that the world has seen a dramatic increase in real estate values, stock valuations, and from a layman’s perspective, the increased cost of purchasing a box of cereal at the grocery store. Covid definitely placed the “tightening of money supply debate” on the back burner, but inflation has really started to take hold. From rumour to fact, here is a chart dealing with the dramatic increase of a 10 year Canada Bond over the last 30 days.
Simply said, as long term interest rates go up, so too does the cost of borrowing. Purchasers of structured settlements will receive a better return, but unfortunately those investing in stocks and real estate need to be aware – it might be time to pay the piper.
Placing a structured settlement? Funding or payout questions?
Call: Joe Pileggi – 647-896-4907
Please feel free to contact Joe via his LinkedIn for annuity illustrations or other structure questions and the advantages of placing your structures with the experts at EPS Settlements Group of Canada.
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