Many people own an annuity. They purchased it to have a steady flow of income, but don’t really understand how their annuity work. Owners of annuities only care about their investment and receiving money on a certain date. Many times holders will consider selling it when they need cash now for something.
1. Is your annuity Sellable?
Not all annuities are sellable. Find out if your annuity is a structured settlement. Most states have laws that protect people who want to sell their structured annuity. If your state has a Structured Settlement Protection Act a judge will have to approve the sale. This is to protect your best interest. Before you shop around for annuity buyers, find out what the resell value of your annuity is.
2. Find a buyer for your annuity!
Annuities are complex. It’s important to find a reputable annuity buyer that will guide you and explain the process. When selling anything look for multiple offers. Visit websites that offer to buy annuities. Use their quote form to get a quote from them at no cost. Sellers need to understand that they will not receive the full value of the annuity, any company you reach out to, will review your annuity and make you an offer that is beneficial to both parties.
3. What you will receive for your annuity.
Did you know that depending on the seller’s needs and financial situation, an annuity could be sold in different ways?
- The most common is the Straight purchase. The company buying your annuity gives a generous lump-sum payment for the entire annuity. Seller stops receiving scheduled payments.
- Many go for Partial Purchase. This gives the option to the seller to only part of the annuity. This is a good solution to a sudden cash flow problem. Get the cash you need, but still keep your future payments.
- Split Purchases. Sell a part of your monthly payment. Receive a lump sum for the percentage you sell and still receive monthly payments.
- Reverse Purchases. Sell some years of your annuity. If you have a 20-year settlement you can sell specific years (example years 5-10). You will keep receiving your monthly payments till the 5-10 year timeframe of your annuity. After that your payments restart.
These are few tips to consider when selling a structured annuity. Ask the company buying your annuity to help you decide what option is best for you.