If you are in need of some cash to start a small business or pay off certain debts, selling off a portion of your annuity payments could help you a lot. An annuity is basically a financial tool or a form of savings by means of which you get into a contract with an insurance company that pays you an amount of money periodically after a certain age, or after retirement.
Types of annuity
There are two types of annuities – deferred and immediate. When you own a deferred annuity, you invest a certain amount of money over a long period of time and start getting returns once you retire or after a specified time period. An immediate annuity, however, starts paying off the investor soon after the money is being invested. This type of annuity is usually bought by people who are on the verge of getting retired.
Basis the amount of sum that would be paid back to the investor, an annuity can also be classified as fixed and variable annuities. If the payout is a fixed amount of money, it is a fixed annuity. On the other hand, if the payout depends on the market or company conditions, it is called a variable annuity.
Options that you have while selling annuities
While selling off annuities, the sellers have many options. Either they can sell off the entire annuity payment or do it partially. The major options are as mentioned below.
If you want to sell the annuity in full, you have an option for doing that. By selling the annuity in its entirety, you would be getting a lump sum amount from the buyer and all your future annuity payments would stand canceled.
You can sell off your annuity payment on a partial basis as well. By doing so you would not be getting the periodic amount for a specified period of time as agreed by you. Post that period, your periodic income from the annuity would again resume as usual.
The third option while selling your annuity is to opt for reverse partial selling. Over here, you would be selling a partial amount of your annuity payment for a specified period of time as per your convenience. For example, if you were supposed to get annuity payments until the end of your life, you can sell just a portion of it, like from eleventh to the fifteenth year. This means that you would be getting your annuity payments until the tenth year, will not get it from eleventh to the fifteenth year and then continue getting it again from the sixteenth year.
Important annuity Selling tips
There are many ways to sell the annuity payments. To begin with, you can approach the same insurance agent who had sold you the annuity product. While there could be a transaction cost involved in it that would still be the safest way to get maximum returns from the annuity. There are many annuity brokerages that connect the sellers and buyers of annuities.
You have to ensure that while you sell your annuity payments
Do not rush. Even if you are in a hurry to get some quick money, do check out all your prospects and find the best value for the annuity.Settle4cash.com
Seek professional help. Professionals from the field would be able to interpret the different offers better and would be able to let you know which offer would pay you the best. They are the best identifiers of hidden clauses that could cut the amount short by huge margins.
Check on the turnaround time of the prospect buyers. You would certainly not want to wait for ages to get your investment back after you have sold your annuity payments.
Reasons to sell the annuity payments
As mentioned in the beginning, you may want to sell the annuity payments to meet dire requirements of cash. The common reasons that cause a sudden need of cash inflow are:
- Education of children
- Invest in real estate or stock exchange
- Need of capital for starting a new business or expanding the existing one
- Funds required for buying home or home improvement projects
Also, if the annuity no longer fits your financial strategy, you may want to free your money by selling it off and using the money in something else.