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Selling your annuity can be relatively painless if you are informed and knowledgeable about your financial options. MyNoteMarket has collected information about the annuity sale process and resources to help you research your options. A traditional annuity sale/transfer has a different process than selling an annuity linked to a structured settlement. Use the Education section below to quickly understand: Once you have gone through the Education section, use the additional Resources to research potential buyers, review current news and blogs, and get links to tax and legal sites. |
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1) First you should determine your current and future cash needs and financial condition. Remember, you can sell all or just a portion of your future cash payments. It is recommended that you consult a financial advisor or lawyer. 2) Contact the insurance company or financial advisor who issued/sold your annuity to determine if you can cash out(surrender) the annuity and what penalties are involved. Depending on the type of annuity and contract, it may be possible to surrender the policy and pay a surrender charge directly to the insurance company. This option may give you more money than selling the annuity. Some immediate annuities do not have an option to cash out early. If the surrender charges are too high or the annuity does not have a surrender option, you should obtain all the contract/policy details and confirm the annuity can be assigned to a new buyer. You will need this information to give to the potential buyer. *Tip: Even if an insurance company says the annuity is not assignable or transferable, you may still be able to sell your payments. |
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Annuities are priced by discounting the future payments by a discount rate. This discount rate can vary widely from 7% to 17% or more depending on the buyer. The lower the discount rate, the more you should receive for your annuities. Also, the further out a payment is, the more it will be discounted. Meaning you will receive less cash now as the time to receive future payments increases. Check out these links for more information: |
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There are numerous potential buyers for your annuity, it is hard to choose the right one. But with a little due diligence(research), you can select several that are reputable and right for you. One important point you should be aware is whether you are dealing with a principal or broker. If you a dealing with a principal, you may get better pricing due to the absence of the broker fee. Most principals use brokers to bring them business but there is a definite cost associated with this added layer of service. But brokers can be valuable in finding multiple buyers and could potentially get better pricing even after factoring in their fee. The buyer should pay the broker fee, not you. Here is a guide to help you choose the right buyer: - How long have they been in business?
- Is their contact and business information verifiable?
- Are they bonded or insured?
- What is their underwriting criteria?
- How is their Better Business Bureau rating?
- Do they handle your type of annuity?
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Here is some basic terminology for annuities: Annuity - A financial product usually sold by insurance companies or other financial institutions to provide financial planning and/or savings. In a structured settlement, an annuity is used to make payments over a specific period of time. Annuities are regulated by several professional and governmental organizations. For more info see: Annuity - Wikipedia Annuitant - The person or persons who receive income from an annuity contract. Usually the Contract Owner. Annuitization - Conversion of a deferred annuity contract to an income payment stream. Annuity Certain - An annuity contract that pays periodic income payments for a stated period of time, regardless of whether the annuitant lives or dies. |
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Annuities
