You may not realize it but the annuity payments you receive each month can actually be sold for a lump sum. Before you go and sell annuity payments though, keep in mind that you are giving up years of dependable periodic payments for a large lump sum.
Determine first if one is more important than the other or if both are equally desirable to you. The presence of certain circumstances could make it easier for you to decide. For instance, if your financial situation has changed or if you have just inherited an annuity, then selling your annuity payments may be your best option.
Consult your insurance agent to find out if you can cash in without having to sell annuity payments. Since each kind of annuity has different terms, you may be able to receive a lump sum, but be sure to ask what penalties are involved. Or you may find that your only choice is to sell annuity payments on the secondary market. Either way, it’s worth following the next step to discover all your options.
Contact a company that purchases annuity payments on the secondary market, and ask for a free quote. To find a prospective buyer, you can ask your insurance agent or financial planner for references, or search online for a company that buys annuities, but be sure to check out the company’s reputation as well. And never sell to the first buyer that comes your way.
Shop Around for the Best Offer
Before you make a final decision to sell, compare quotes from several companies and make sure their representatives’ answer any questions you have. You can sell all or part of your annuity payments, so you may want to ask for quotes for only part of the payments, as well as the total amount.
Inquire about tax consequences as well, and discuss them with a CPA or other tax advisor if you’re not sure how selling annuity payments will affect your taxes. Once you’ve considered all your options, you can sell your annuity payments with confidence, knowing you’ve made the best choice.
