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Must read for anyone selling annuity payments

annuity payments

An annuity owner may consider selling annuity payments for various reasons. At times because of changing needs and interests, part or all of the payments made for an annuity may need to be reversed, or reimbursed on different terms. At such a time, selling is the only option.

Annuities and the Different Types Available

An annuity is a contract made with an insurance company where a lump sum is paid, or regular payments are made for a given period. In return, the insurance company submits payments to the person taking the annuity beginning either immediately or at some time. Annuities are preferred mainly by people facing retirement because they assure of a steady income. There are five main types of annuities. Here below are the five types.

1. Variable annuities

With this type, a person can invest by choosing from a variety of mutual funds.

2. Fixed annuities

These give a fixed interest rate.

3. Immediate annuities

These are structured more like life insurance policies.

4. Deferred annuities

Here the payments are made at some future date.

5. Fixed-indexed annuities

More like fixed annuities but have a variable interest rate depending on certain factors.

What are the options to sell?

A seller will usually determine the value of his savings he wants to get. There are two options to sell annuity payments. A person wishing to sell can go for partial or entire sale. Part of the annuity is sold in a partial sale. A seller may opt to sell part of the payments by reducing some of the time income will be disbursed. For instance, if payments were to be received for say ten years, a seller can opt to sell the last five and receive payments the first five years only. 

The other option for partial sale is where a seller reduces the cash received per disbursement. The seller receives a lump sum payment and continues to receive a regular but reduced payment for the duration of the contract.

Selling annuity payments in entirety is the other sale option a seller can choose. This option completely terminates regular payments and instead the seller receives their cash as a lump sum.

How to make a sale of annuity payments.

When a contract for an annuity is made with an insurance company, backtracking and changing the terms of the contact is not possible. The fact that the contract with the insurance company cannot be altered is what necessitates selling annuity payments. Obviously, this does have its challenges considering it involves seeking out a buyer, doing plenty of paperwork and making some court visits.

A structured settlement company is the place to go when one wants to sell annuity payments. These companies make the process feasible and efficient. They handle everything required to make the sale. They have experience in buying annuity payments and handle the whole process with ease. 

A seller gets a quote from a structured settlement company when they contact one. The company will do assessments, arrange court visits, write to the insurance company and seek permission to buy the annuity payments. Once approval is granted by the insurance company, they will initiate the process of buying. Some structured settlement companies even give cash advances to sellers after they receive approval from the insurance company. Many of these businesses will speedily assign a seller a representative to follow up their case, making everything quick and straightforward.

These companies will often access the need for cash that the seller has, and if it is found valid, only then will they initiate the sale. Structured settlement companies also advise the person who wants to sell annuity on the best options open to them. This advice is important because it hedges the seller from making a decision that they could regret in the future. A person may retire or experience another change in life and find they have used all they had. Good advice from an annuities company helps avoid such eventualities.

Structured settlement companies do up to 1000 transactions per month. A seller need compare the services the companies offer to enable them to choose a reliable provider who matches their needs.

Why people sell annuities.

Having an annuity is a good idea because it gives one investment for the future. It may come as a surprise that someone wants to sell their annuity payments. Here are some reasons why a person may want to sell their annuity payments.

  • Have experienced a change in financial status such as a change in income.
  • Require to make a payment for a debt.
  • Buying or renovating a home.
  • Sustained an injury
  • Investing
  • Remorse after buying
  • Inheriting an annuity
  • Divorce
  • Wanting to fund college.