An annuity is a financial tool that not only helps you plan your retirement but also ensures financial security for life. Annuities are sold by insurance companies or financial institutions and are essentially investment products in which you invest a lump sum and receive scheduled pay outs for a period of time or in some cases, for life. Before purchasing or investing in an annuity, it is crucial to learn which product suits your lifestyle, financial requirements, and care needs. If you have already invested in an annuity, you can sell your payments to be financially independent and meet your current expenses. To help you make an informed decision, you require to understand the different types of annuities available in the market.

Annuities are essentially of five types. They are:

Fixed: Fixed annuities are designed to suit the needs of retirees who aim to live on a modest but guaranteed income. Fixed annuities are investments that offer an interest and are typically issued by insurance companies or banks. You can chose whether you wish withdraw an income immediately or can defer it to a later life stage.

Variable: Variable annuities allow you to choose from a wide range of mutual funds, which can be used to guarantee an income irrespective of how the world’s markets perform. If you’re looking at capital appreciation in addition to a guaranteed income, a variable annuity is for you.

Fixed Indexed: Do you wish to invest in an annuity that combines fixed and variable features? If yes, the fixed indexed annuity is an ideal choice. A fixed indexed annuity offers you a guaranteed income and allows you to participate in the market.

Deferred: A deferred annuity provides you with an income stream only from the date determined by you. By investing in a deferred annuity you not only increase your savings but also your future income. This type of annuity is ideal for retirees who desire to have a guaranteed income in the future.

Immediate: The mechanisms of an immediate annuity are very similar to an insurance policy. Instead of paying monthly premiums, an immediate annuity will need a lump-sum payment, which provides a regular income for life starting immediately.

Why would you sell an annuity?

Whether you need to pay for a medical emergency or wish to buy a new home, selling your annuity can help you control your finances and avoid debt. If you’re keen on selling your annuity payments, you should find out about your selling options. There are two major ways of selling your annuity, which are partial surrender and complete selling.

Partial surrender: If you wish to meet an immediate expense such as an expensive hospital bill, withdrawing from your annuity can be a solution. If you’re already receiving an income from your annuities, you cannot make a withdrawal. But, if you have invested in a deferred annuity, you will be able to withdraw a lump sum from your account. If the withdrawal amount exceeds the limit set by your insurance company, you may have to pay surrender fees.

Selling in entirety: If you feel you have a need that a partial withdrawal cannot meet, selling your entire annuity can be of help. You can sell all your annuity payments to a third-party settlement purchasing company, which will provide you with a lump sum amount. You may not have to pay surrender charges if you sell your annuity payments.

Safe ways of selling annuity payments

If you’re planning to sell your entire annuity, you would first need to get in touch with an annuity buyer, who can provide you with impartial advice with regards to your financial situation. Often, dealing with insurance companies on the selling of annuity payments can be stressful; which is why finding the right buyer is important. All annuity sales are governed by the Federal law, which ensures that you receive an impartial hearing.

An annuity buyer will represent you to the insurance company and the court. The buyer will also manage all the paper work required in addition to ensuring the changes you desire are implemented. Once both you and the insurance company authorize a sale, approved by the court, the annuity buyer can deposit the lump sum into your account or issue you a check.

There are many external factors that may impact the selling of annuity payments, which include tax implications, value of the annuity and the discount rates applicable. In most cases, you may be required to sell your annuity at a discounted rate to ensure a sale. The discount rate is determined by possible future interest rates and the current value of your annuity. In addition to determining the exact value of your investment, you will also need to be aware of the tax implications involved.

The duration of the selling process depends on the court and the judge, which varies in every location. When the court approves the sale, you can be sure of receiving a payment within 72 hours.

You may wish to sell your annuity if:

· You need to pay off a loan

· Buy a new home

· Start a business

· Buy a new vehicle

· Pay for a child’s college fees

· Medical expenses

· Long-term care

· Loss of employment

· Paying off debts

· Inherited annuity

· Suffering from injuries

Selling annuity payments can spell the end of financial troubles. Why wait and put your life on hold when you can get it back on track by selling your annuity payments.