An annuity is a contractual agreement made with an insurance company to invest money into the annuity and then later it makes payments to you. This is a popular choice for retirement investing, especially for those who prefer a steady income stream after they retire. Here are the main types of annuities:
- Immediate Annuities is the simplest form of an annuity. The investor simply makes an up-front, single payment to an insurance company in exchange for payouts from the annuity that will begin immediately. These payouts can be structured on whatever schedule you like.
- Deferred Annuities are basically the same as immediate annuities with one key difference. You cannot start receiving payouts until you reach a certain, agreed upon age. This will be dictated in your contract.
- Fixed Annuities values increase based on contractual fixed or stated returns. These are generally also deferred annuities. Interest rates tend to be higher on these types.
- Variable Annuities values are dictated by a certain market. These annuities are tied to the stock market, bond market or other investment niches.
What are the options?
Annuities can be great sources of steady income, especially for retirees, however, life can bring about unforeseen obstacles that require an immediate financial cost. For some, selling annuity payments to a buyer like CashInYourAnnuity can be the answer. So what options do you have if you decide to go this route?
- Partial Sale: A partial sale the seller can exchange pending payouts for immediate cash with a discounted rate factored in. The good thing about partial sales is that you will still receive annuities on the unsold portion of your annuity. This will help you meet immediate financial needs while at the same time still benefit from future payouts.
- Entire Sale: In situations where doing a partial sale simply won’t produce enough money for the need an entire sale may be your only option. This type of sale consists of exchanging the entire value of your annuity for immediate cash, again at a discounted rate.
What do I need to do to sell my annuity?
So you need money and you have decided the best way for you to get the funds you need is to sell annuity payments. So now you need to know how to go about it. There are some very important steps to make and things to take into consideration when selling annuity payments.
- Decide exactly how much money you need. The first thing is to determine how much money you need from selling your annuity.
- Take into consideration the costs of selling. Taxes, surrender fees, discount purchase price and any other costs associated with cashing out your annuities need to be calculated so you know exactly what you are looking at for a return.
- Make an informed decision based on how much money you need, how much it will cost you, and how badly you need the money.
- Contact the insurer that owns your annuity. Have an honest conversation about your situation and what the best options for cashing out will be.
- Fill out and submit the appropriate paperwork.
- Shop around. Take your time and contrast and compare annuity purchasing companies. Research them thoroughly making sure to read reviews and check the BBB for any issues.
- Consult with an attorney and/or a broker. The more expertise you can get on your side the better when dealing in investments. They can help make sure you get the best value for your annuities and they can also help protect you from any unforeseen issues.
- Choose the best option and sell your annuity. By this point, you should have all your evaluation and pros vs. cons thoroughly considered and you can choose the best option for cashing out your annuities.
Why would I need to sell my annuity payments?
Obviously, by nature, the best course of action with annuities, especially if you’ve only had them a short period of time is to leave them alone and let them do what they were designed to do. However, if life were that simple you might not have needed to invest in them, to begin with, right? So what are some good reasons people decide to sell ammunity payments?
- Paying off debt. This is a big one and probably the most common reason people choose this course. In today’s world it’s easy to accumulate debt and if you’re not careful it can get out of hand.
- Emergencies are unfortunate but they are a reality. Unforeseen circumstances can cause your world to fall apart. You could have a car accident that puts you out of commission for a period of time. There are many things that can happen in life that would constitute needing funds quickly.
- Unemployment can be a traumatic and financially devastating occurrence. People get laid off and terminated every day. For many, losing their job can put them in a tailspin that is hard to recover from.
- Buying a home is a huge decision. Selling an annuity in order to help purchase a home can be an effective long-term value strategy.
- Purchasing or establishing a business. Selling an annuity to use as capital to start or buy a business is another long-term investment strategy.
At the end of the day, there are many reasons that selling annuity payments is a good idea. Just be sure that you balance the pros and cons of the situation and take into account every aspect before making a decision.