Selling Annuities for Cash is a Viable Option For Those Who Need a Lump Sum of Money Now
Selling Annuities for Cash is a Viable Option For Those Who Need a Lump Sum of Money Now
Selling annuities is a viable option for those looking for an immediate source of money for a particular financial need, be it an investment, a large purchase or even a debt payoff. Rather than have to go through the hassle of a new bank loan, many people choose to sell annuity payment either in its entirety or as a partial. It is a quick and easy way to receive a large sum of cash in the short term.
Annuities are regular monthly payments, usually tax-free, that one receives either through a personal or business investment or through a structured settlement as a result of an injury case.
They are administered through insurance companies, and each month for a set period of time the person receives a certain amount of money.
Although it can be nice to receive a steady income month after month, there comes a time in many people's lives where they need a larger sum of money in the short term. Others decide that they no longer want to wait for small payments to dribble in, or perhaps they are ready to retire.
Whatever the case may be, selling annuities can yield the cash you need right now. There are professionals, called note buyers, who can purchase these annuities from you, giving you cash in hand in a matter of a couple of weeks.
Keep in mind that you can sell annuity payments as partials; i.e. if you have a $75,000 annuity but you only need $35,000 in cash right now, you can sell only $35,000 worth of monthly payments, and keep the remaining $40,000 worth coming in every month thereafter.
You can also split the monthlies right down the middle, selling 1/2 and keeping 1/2. The note buyer will go over all of your options with you.
How much will you get when you're selling annuities?
There's no set amount, or set percentage...there are many factors that go into placing a value on your annuity, and a buyer will take all of them into account. Some of these include the balance remaining, the time left, any balloon payments due and the financial stability of the party making the payments (payor).
Because the purchaser is assuming the risk, it is never a 1:1 buyout. That is to say, if you have $50,000 left spread out over a number of months or years, you won't receive $50,000. Why? For one, due to inflation, money today is worth more than money tomorrow. The money you are receiving each month is worth less with the passing of time.
Also, when you sell annuity payments the note buyer is assuming all of the risk; the payor could default at any point, inflation could soar, the economy could take a hit...all of things are taken into account. Obviously, the more secure your annuity, the more you can expect to get for it.
In any case, selling annuities always makes sense for two reasons:
1) you are receiving a guaranteed lump sum of money now, without having to wait for months or years;
2) you are no longer exposed to any financial risk...the peace of mind alone is invaluable.
So if you're looking for a lump sum of money, you can sell annuity payment to a professional note buyer and usually receive a check in just a few weeks. Just make sure you find a qualified, experienced buyer who can offer you top dollar for your annuity.
Cash for Annuity Payments - Tips for Selling Your Structured Settlement
People who need cash for annuity payments can sell their structured settlement to a private note investor or lending institution. However, doing so is not without risk. It's important to understand how this type of financial transaction works and even more important to scrutinize the company you plan to sell to.
Obtaining cash for annuity payments is a rather complex process and requires the assistance of a structured settlement specialist. This can either be an attorney or professional who has been trained in this field. You can begin the process by contacting the company who organized your structured settlement or you can choose to work with another individual.
When you sell annuity payments to a private investor or financial institution, you assign them the right to future payments in exchange for a lump sum of cash. Annuity payments can be sold in whole or part. For example, if your structured settlement provides payments for twenty years, you can sell one to twenty years of payments.
The first step to obtaining cash for annuity payments requires you to determine how much money you need. Many people choose to sell their structured settlement payments to pay off debt, medical expenses or college tuition. Others desire cash for investment purposes such as purchasing stocks and bonds or real estate.
The second step requires you to gather your structured settlement details. The note investor or financial institution will need to know the name of the life insurance company backing the annuity payments, along with the exact dates, amount of each payment and how many payments are remaining.
Additionally, you will need to inform the investor of how much money you need and how many payments you wish to sell. This information allows the note buyer to determine the present day value of your structured settlement.
The investor will review the information and contact you to discuss various payment options. Private investors who specialize in structured settlements typically have access to a number of annuity buyers and will be able to connect you with those who offer top dollar for future annuity payments.
The initial consultation will take about one-half hour of your time. You want to feel at ease with the investor and should seize this opportunity to ask questions and obtain references. Be certain to contact referrals and conduct research on the company through the Better Business Bureau.
Once an annuity buyer is located for your structured settlement, you will receive documents which will need to be signed and notarized. As required by state law, this process takes a minimum of 3 to 10 business days to complete.
The signed documents are then sent to a factoring company who facilitates the underwriting process. Once the underwriting process is completed, the transaction must be approved by a judge who authorizes the transfer of payments.
Typically, you must have a compelling reason to sell your annuity payments for cash. Reason being, structured settlements are issued to ensure the recipient will have funds to cover living and healthcare expenses. Many judges are reluctant in allowing individuals to sell their payments for cash unless they show just cause.
Before you attempt to obtain cash for annuity payments, take time to conduct thorough research. Investigate several note buying companies and speak with at least three consultants prior to making your decision. This will help ensure a positive experience when obtaining cash for your structured settlement.
