Sell My Annuity Payments For Cash
"I want to sell my annuity sell for a lump sum, but I don’t know the process?"
As we outlined above, the process is simple, but you want to get a professional to help guide you through as there are areas which can get complicated.
- Get all the paperwork associated with your annuity payments together before you contact anyone about selling your payments.
- If you don't have your paperwork, you can get an expert to help pull your information from the national database of structured settlements and annuities.
- Do your research carefully on who to hire to represent you to find a right buyer for your annuity payments. We wholeheartedly recommend DRB Capital as they guarantee to give you the best cash offer with the absolute lowest fees in the market.
- Once you hire a rep and they get you an offer, you want to evaluate it, accept it by signing it and then returning the signed offer to the rep.
- Annuities are often a structured settlement, and by law, a judge has to approve the sale to ensure it is in your best interests, and you aren't going to use the money for a purpose that will not benefit you and your family. For example, if you wanted the money to gamble with the judge is probably not going to approve of the sale of your payments.
- Once the judge approves the sale of your payments the paper work is transferred to the new owner, so they will begin to receive your annuity payments.
- 3-5 business days later your money will arrive in the form of a wire transfer or by certified check.
"Sell Annuity - The Inside Information"
Cashing in annuities is not a small task, nor one you should take on yourself. If you are looking to sell your annuity payments, you are probably in debt. Did you know that that average household carries $129,579 in debt? That level of debt constitutes at least $19,000 of interest per year. Think about that, paying $19k a year on interest on the unsecured debt. Factor in the interest you are paying on your home mortgage, and it can get downright frightening how much of your disposable income is going to just interest.
Can selling your annuity payments get you out of debt? Possibly, but consider the following tips to make the right decision not just for right now, but your long-term financial plan. Is your annuity payout weekly, monthly or annually?
- Don't Rush Things. Your biggest mistake is to rush into a decision whether to sell or not to sell your annuity payments without taking the proper time to weight your options. Along with the debt number we listed above, did you know that one-in-five Americans are in debt hardship? If you are in the same boat, if you don't take your time through this process you could make a bad situation even worse.
- Shop Around For The Best Deal. How do you know if the offer you get is the best one? Are they offering you a guarantee? What are the fees involved with the transaction? Are they upfront with all fees and costs associated with the transaction? List all the pros and cons so that you can make the right decision.
- Get a Professional On Your Side. Selling an annuity isn't an easy task, it can be confusing, overwhelming and downright stressful. There are some companies which charge what is called a "surrender fee" and that can be 10% of your annuity payments. A professional can uncover these hidden fees and consult you for the best offer to take that will give you the most actual cash. Avoid getting surprised by having a professional on your side through the process.
- Avoid Putting All Your Eggs In One Basket. Annuities are often a key to many people's current financial income, and you don't have to sell you entire annuity payments. You can just sell a portion if you wish. So think about it carefully before making a decision to take the measure of selling annuities for a lump sum cash out payment. Your annuity payments might be your current lifeline for your family, so make your decision carefully.
- Sleep On It. This advice has been around since the dawn of time and it vital when it comes to deciding to "annuity cash out" your settlement.
"What happens to my annuity or structured settlement when I die?"
There are many annuities which end entirely upon the death of the annuity holder. Often, this is in the fine print and if you are receiving the settlement based on a personal injury. If this injury has affected your long-time health, your surviving spouse, children or relatives may not receive the total payments.
If you had good representation, your annuity payments should be protected in the event of your death to allow the payments to continue and be given to your stated beneficiaries. If you are unsure, you can check your policy and look for the phrase "guarantee period" or "period certain" regarding your payments.
Another phrase to look for is a "communication rider." This refers that if the policyholder should die, a discounted lump sum of payments will be paid to the policy holder's beneficiaries. This would be in place of the payments continuing as they have in the past. The main reason for this rider is for tax reasons.
The last phrase you should look for is "joint and survivor." This mean the policy is shared between the holder and beneficiaries. Should the owner of the policy die, the payments will continue to the recipients as listed.
How To Cash Out An Annuity Early?
The process of selling or cashing out your annuity payments early is very straightforward and has been outlined throughout this page. Selling annuity payments is no different than selling a structured settlement.
How To Compare Annuities
Step One: Identify the Characteristics of Annuities
Thefirst major distinctionbetween annuities is that of either VARIABLE or FIXED.
Variable annuities are an INVESTMENT product “wrapped” in the guarantees of an insurance policy. Only those persons who are licensed to sell mutual funds AND life insurance can sell them. An important distinction between a variable annuity and a fixed annuity is that in the variable annuitythe purchaser carries all the risk for the increase in the
cash value of the product . The cash value is invested in mutual funds. The carrier will never guarantee an increase in the cash value of this product, and in fact, the cash value will fluctuate (and may lose value) due to market fluctuations
**REAL LIFE EXAMPLE**
Because Jason was a both a licensed securities broker and a licensed life insurance agent he was able to sell Margret her variable annuity.
Fixed annuities are considered a pure INSURANCE product and can be sold by any properly licensed life insurance agent. It is regarded as an insurance product becausethe insurer carries all the risk for the increase in the cash valueof the product. In other words, the increase in the cash value will be via periodic interest payments guaranteed by the insurance carrier (even if the guarantee is a range). The cash value will not lose money due to market changes only because the cash is never invested in the market. (The cash value may decrease due to fees or withdrawals if the fees and withdrawals exceed the guaranteed growth – but more on that later.)
**REAL LIFE EXAMPLE**
Because Michael was a licensed insurance agent, he was able to sell Chris and Michelle their fixed annuity. He could not have sold them a variable annuity because he was not licensed to sell mutual funds, nor could he have sold Margret her variable annuity. Either he or Jason could have sold Mark the immediate annuity he was considering.
Immediate vs. Deferred
Thesecond significant distinctionbetween annuities is that of either IMMEDIATE or DEFERRED. These terms refer to when income from the annuity starts.
Immediate annuities must begin income payouts after 30 days (if a monthly payout is requested) or after one (1) year (if an annual lump sum is required).
A deferred annuity allows payouts only after a specified period. After the specified period has passed the annuity owner can request income at any time.
Single Premium vs. Flexible Premium
Thethird major distinctionbetween annuities is that of either SINGLE PREMIUM or FLEXIBLE PREMIUM. These terms refer to how money can be put into the account.
This purchased with one lump sum of money; no other amounts of money are accepted.
This is purchased with an initial lump sum of money (usually subject to a minimum); other sums of money (sometimes subject to a minimum) may be added as cash in basis on either a regular or irregular schedule.
All annuities are one or the other of these three characteristics.
WHY THIS INFORMATION IS IMPORTANT TO YOU
This information acts as kind of a “road map” for you so you can “locate” exactly what type, and options to sell your annuity. Do you need all of this info to compare annuities? Not really. But you can use this info to rule out annuities that don’t meet your needs. For instance, if you know you will be adding money as time goes on you will need a flexible premium and you can just disregard those that only accept a single premium. Similarly, if you know you do not want to take income right away, you will be overlooking immediate annuities.
Who Buys Annuities?
**REAL LIFE EXAMPLE - MARCUS**
Marcus was involved in an accident at work, which resulted in a trial. The injury Marcus suffered to his left hand was substantial, and kept him from performing his job as he was left handed. Being a 17-year expert welder, this was devastating to Marcus. Even more stressful than being out of work and losing nearly all function of his left hand, the company he had been employed for over ten years took him to court to claim it was his negligence which caused the injury. Thankfully, the jury found in Marcus' favor, and he received a substantial settlement.
The settlement was paid out in an annuity payment setup, years later, Marcus found himself in a financial situation which he could see no way out of on his own. He saw a commercial on television stating they were experts in taking annuities for cash. He called and quickly realized that the company did not have his best interests as they offered him a mere 18% cash of what his annuity payments were worth.
Marcus learned a valuable lesson in just one phone call when someone has their back to the wall financially; they can often make a poor decision as he almost did, as the lump sum of cash for annuity payments sounds tempting. However, simple math will show why it is a bad deal and find a stable company, like DRB Capital which guarantees the highest cash payment along with the lowest fees in the annuity selling industry.
**REAL LIFE EXAMPLE – CHRIS AND MICHELLE**
Chris and Michelle bought a Fixed Index Annuity. From the three listed criteria above, we immediately know this is a fixed deferred annuity, which may be either single premium or flexible premium (this info is not given in the case history). While this provides us with a little bit of info about the annuity (the insurance carrier shoulders the risk for the cash-value appreciation, and Chris and Michelle have a choice as to when they want to start income), it doesn’t give us enough information to perform any meaningful comparison.
NOTE: The word Index in the annuity Chris and Michelle bought refers solely to the way the interest is credited to the cash value and how the pension is going to be calculated.
**REAL LIFE EXAMPLE - MARGRET**
Margret bought a deferred variable annuity also non-specific for premium. Again, not enough information to perform any meaningful comparison between it and another pension option.
**REAL LIFE EXAMPLE – MARK**
Mark was contemplating (but did not purchase) a fixed, immediate, single-premium annuity. In the annuity industry, this is usually called an SPIA (Single-Premium Immediate Annuity – pronounced spee-uh).