Selling an annuity is not as difficult as it may sound. In fact, many companies exist to facilitate such sales. For example, if you have been awarded $100,000 for a car accident you were involved in, you can sell the annuity to an independent annuity dealer and they will pay you one lump sum. The advantage for the company buying the settlement is they assume payments from the payer.
In some instances, you don’t have the legal right to sell the annuity to a third party. You’ll need to check with your state’s laws and ordinances to see what the restrictions are when selling an annuity.
So why would someone want to sell a structured settlement? That question is rather simple to answer. Things change. Your life’s circumstances vary greatly depending on cycles and stages in life. For example, you may want to purchase a new home, you may need money for college, or you may have debts to pay off. Whatever the case, having a lump sum of money will help you immediately resolve any financial issues you may have.
Now, if you do have a structured settlement of sorts, you don’t have to sell the entire annuity. You can either sell the annuity in whole or in part. You can talk to the company you’ve decided to sell to and they’ll discuss available options with you. Just remember, you are initially in control of the annuity, so don’t allow a company to treat you as if the annuity is theirs.
If you’re selling an annuity, different companies will offer you different rates. What this translates into is you receive the lump-sum payment, but give up your right to receive the payment in whole. A company will usually pay out 50 to 80 percent of the entire annuity. That means if you have a settlement for $10,000, and you want to sell the whole annuity, you will only receive $5,000 to $8,000 for it. That’s where these companies make their money. But it does offer a “quick cash now” solution to any financial circumstances you may be in — which might be better in the long run.
The process to enter into an agreement with a buyer is not difficult. You simply make the agreement to sell the structured settlement to a buyer. The buyer then goes to court to see if selling the structured settlement is in your best interest. Once a judge has ruled that selling the annuity is in your best interest, you sign any and all documents releasing the settlement to the buyer and you receive your lump sum.
The whole process usually takes around 90 days to complete. If anyone advertises less time than that, they’re probably not telling the truth. Also, if your structured payments are related to a personal injury claim, you won’t have to pay any taxes on the lump sum of cash you receive.
If you decide to sell an annuity, make sure you choose a reputable company and one that will offer you the best, most competitive rates. You want to be able to get the most money for the structured settlement you’re selling.
By John Ivie