An annuity can help retiring individuals create income after leaving a job. It is also available to retirees, but making a considerable payment is essential to start receiving the income. This plan can complement your retirement benefits from your former employer and ensure financial freedom.
This financial instrument is very versatile. It can help you get an immediate lump sum of cash in situations that call for it. You may need to pay for education, settle debt, or any number of other things. The question that most individuals have is, “what should I expect when I sell my structured settlement?”
How it Works
There are three ways to sell your annuity for cash. These include selling the product for a lump sum, doing a partial sale, or forfeiting your future income.
This allows you to sell your annuity for a particular period of time. An annuity contract with your insurance company will usually cover you for a lifetime. Therefore, you can opt to sell your annuity for several years to get cash immediately. You will not receive the payments for this time period, but once the time is up, you will begin receiving payments again.
The partial forfeiture option is beneficial, because it is not permanent. You will get the money to cater to a pressing need and still have a plan for your retirement. If you have other sources of income for your daily needs, consider this option.
The contract with your insurance company will indicate your income as part of the annuity program. Therefore, you can decide to sell a percentage of these earnings to a company. The firm buying your annuity will receive the payments for a period until they recover their money. You will not lose your entire retirement plan, as you will continue receiving the income in the future.
A lump-sum sale ensures you get the amount of money you need. However, you will forfeit more because the buyer will profit from the deal.
Selling in Entirety
This plan entails selling the entire contract with your insurance firm. It is available for retirees already receiving income, or anyone who will be receiving payments in the future. When you sell your annuity, you will not receive any amount later on. You will receive the amount in your contract at once and forfeit your scheduled payments.
If you want quick cash, consider selling your annuity. Be sure to consider your immediate and future financial needs to find the best approach, and ensure you have a clear objective on why you want to sell.