An Annuity is a contract between a customer and an insurance Company in which the customer makes a series of payments or one lump sum payment, and as a result, the client receives periodic disbursements either in check or cash beginning at an agreed time. Annuities are financial packages designed to cushion persons about to retire from active employment or individuals who are already enjoying retirement but are seeking investment opportunities. Investors wishing for guaranteed repayment incomes often turn to annuities. The plan is simple. You make a deposit to an insurance company, and in return, you receive a stream of payments at regular intervals. No tax is imposed on the savings, and they’re immune to other financial risks. If you plan to become an annuity owner, there are many insurance companies, brokers, and banks that issue annuities. But before you buy, make sure to check out the ratings of Annuity Issuing companies provided by Standard & Poor, Moody, and Fitch to get the business with the best reputation. Once in a while senior citizens are faced with insurmountable financial problems ranging from medical expenses to going for a vacation. Some of the problems can be addressed by selling annuity payments.
There are two basic types of annuities popular with investors and retirees:
An Immediate Payment Annuity is an annuity contract that can be purchased by a purchasing company like Settle4Cash.com with a single lump sum payment. While a deferred annuity contract starts only after a period of time has elapsed after the final purchase.
When you make a decision to sell your annuity or structured payment, there are several investment options you can choose from:
A Full Purchase
In this option, you will get a lump sum payment from the Insurer upfront. And you will not receive any other payment from the settlement or annuity.
The Insurance Company can buy your immediate settlement or annuity for the period that you want. And at the end of that time, you will start receiving cash immediately against those future savings. Maybe you don’t need the money now may need in future. The company can still buy the payments for the next five years, as you retain all rights to receive future payments after the five years.
Multiple Stage Payout
Purchasing your settlement or annuity with various lump payments is possible. You can choose from monthly payments to an annual payment.
Split Disbursement Partial
You may be receiving $2000 per month, but only need $1000 a month. You can get a lump sum payment for the portion you don’t need in future, as you continue to receive the balance of the annuity you need now.
Many insurers are willing to work one on one with you to prepare a tailor-made schedule that will bring you value. If you want cash immediately, but still wish to withhold savings, then you may need to plan for payments to start within the next few months. But if you want income the moment you retire, then you can initiate payments many years after purchasing.
How to Sell Annuity Payments
To protect the seller and the buyer, the sale of annuity payments is protected by law in all 49 states. While the process is relatively straightforward, there are certain documentations and disclosures that you need legal advice to review and understand adequately. CBC, which is the Federal Agency mandated to regulate the sale and purchase of annuities will monitor every step to ensure the sale goes smoothly.
If you’re planning on selling your annuity, then your first step is to schedule a meeting and contact one of CBCs annuity buyers. During the meeting, he will guide you step by step and describe the various options that are available, including partial sale, lump sum sale and he will offer assistance by guiding you to choose the best variable to suit you.
Once you’ve made a decision for your settlement lump sum, you will be required to complete a couple of legal documents with your attorney. Once you’ve read and understood them thoroughly, you sign and return them to CBC for onward filing with the court.
Reasons for Selling Annuities
One of the commonest reasons that compel people to sell annuities is injury either at the workplace or automobile. If you’ve been injured due to someone else’s negligence, the law entitles you to receive a payment in the form of an annuity. And since injuries consume massive amounts of cash to cater for medication, and since lawsuits and other litigation can take months or even years to be concluded, there is fear of bills piling up. If you face mounting bills, then the only option you have is selling an annuity.
There are many other reasons a person may wish to sell his future annuity payments for cash. Here’s a few:
- Loss of employment
- Investing in stock
- Paying college tuition
- Buying a home
- Emergency/Maternity bills
- Debt repayments/Loan repayments
- Starting a business
- Buying a car