An Annuity provides a guaranteed income stream for a specified period of time and is offered to winners of lotteries or large settlements. Annuities can also be bought through insurance companies. Scenarios may arise where an annuity owner has to get a lump sum of cash instead of keeping the income stream; during such times, the owner can sell annuity payments.
How to Sell Annuity Payments
• Contact the organization where the annuity is held or being offered as a result of winning a lottery or settlement. If you have not decided to accept the income stream yet, this is the best time to ask if the organization can pay you with a lump sum. Once an annuity has begun making periodic income payments, also known as annuitization, the process is irreversible. Accomplish the paperwork involved to take the lump sum.
• Speak with a structured settlement company if you have already begun receiving annuitization payments. You can find many of these firms on the Internet. Explain to a representative the type of annuity you have and the current income stream.
• Get a quote from the structured settlement company. Expect the quote to be a smaller than your annuity’s original lump sum value.
• Look around for the best third party buyout offer. Some buyers may attempt to get your business more aggressively with a higher quote.
• After you’ve found the buyer with the highest quote, file the paperwork with them to begin the process of selling annuity payments. It may take several weeks before the transaction is completed and you finally get your cash.
Since selling annuity payments on the secondary market results in losing so much of the lump sum value, it is best to get advice from a financial expert before choosing a lump sum over an annuity payment. Also remember that the transaction will lead significant tax consequences.
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