Selling Annuity Payments Explained

What is an annuity?

Though the concept of buying and selling annuity is increasingly becoming popular, most people do not understand what is annuity. Annuity refers to a contractual financial payment plan where one pays and grows the funds until Annuitization. After Annuitization, one is assured of receiving a stream of income in the future. The best thing with annuity payments is that, it is not taxed but the revenue stream that is generated subjected to income task just like any other pension payment. The period of time that is between annuity funding and first payout is known as the accumulation phase.

 

Annuity can either be classified as deferred or immediate. In a deferred annuity, a person contributes money meant for investment for a period of time, and then start getting payments at a specified date in the future. On the other hand, if a person opts for the immediate annuity, he/she starts receiving payoffs after making the initial investment. The two types of annuities can be further classified as fixed or variable. In a fixed annuity plan, you pay a fixed amount of money at for a given period of time while for variable annuity, one is there is no fixed amount of money that one is supposed to contribute.

Selling Annuity Payments

What makes annuity a good retirement investment is that, a person can sell annuity payments at any period of time without having necessary to wait for the settled payments. There are various options of selling annuity including partial, entirety and lump sum. For the partial option, one sells a portion of his/her annuity, but continues to receive periodic income while at the same time keeping tax benefit. The best thing with partially selling your annuity is that you will continue to get structured settlement, and in case you die, the benefits will be extended to your next of kin. Selling annuity payments in Entirety means that a person empties all the investment at once eliminating any chance of period payments in the future. This option is best suited for those people intending to switch from one investment to another. Selling annuity in lump sum implies that one gets money in large increment, but at the same time one is assured of a lower income for the structured settlement.

how to sell annuity payments

Benefits of selling annuity payments

Annuity is supposed to provide a source of income after retirement, but selling annuity in exchange for can have numerous financial benefits. Some of these benefits include;

  • Source of instant cash when needed
  • Prevent your annuity payments for loosing value as a result of inflation
  • It is possible to sell a portion of the annuity and keep the rest
  • There are no early withdrawal penalties
  • One can use the proceed to to make even a better investment

Source of instant cash when needed

Even after completing annuity payment, the payments do not commence until the date you set for it to commence. However, selling annuity guarantees instant cash that can be used to make an investment or attend to a more urgent need. This situation applies best for those situations where when one was making annuity payment, he was not certain about the future, but as time goes by, he/she realizes the payment won’t serve him/her well.

Prevent your annuity payments for loosing value as a result of inflation

Not all annuities matures to the value they were intended. In some instances the annuity may lose value as a result of inflation resulting in a loss for the product buyer. However, when one sells their annuity, prevents the above from happening.

Partial selling option

Another benefit of selling annuity is that one can sell a portion of their payment and enjoy structured payment in the future. The proceeds from sales can be used to set up a project or an investment at the same time being assured of a revenue stream after retirement. One can sell annuity payments to make a better and a long lasting investment that can be passed down to generation.

Reasons for Selling Annuity Payments

There are numerous reasons that can make one to sell his/her annuity payments. Some of these reasons include;

1) Setting up a new investment

2) To clear school or medical fee

3) In case of a divorce

4) When one wants to liquidate a long term investment

5) In case one loses a job

However, there exist some types of annuity that cannot be sold. Some of this type of annuity includes

  1. Veterans benefits
  2. Benefits from social security
  3. Payments for child support
  4. Workers compensation payments

All About Structured Settlements

A structured settlement is an insurance or financial arrangement negotiated between the claimant and the defendant in a lawsuit. In this agreement, the claimant agrees to resolve a personal injury by receiving an amount. Only this compensation is not received in lump sum. A stream of money is paid on an agreed schedule by the defendant to serve as an income to the injured party.The income tax rulings stated that if a set of requirements were met the claimant would owe no income tax on the settlement amounts.The periodic payments are often funded through a purchase of annuities, these generate the future payments. An annuity is a fixed sum of money paid to the claimant each year, usually for the rest of their life.

The Possibility of Selling Structured Settlement

Selling your structured settlement for cashThere are times that the recipient of a structured settlement will seek to sell it. This is to gain a lump sum payment to settle their financial issues. They may choose to sell all or a portion of their compensation. The company handling the structured settlement company often pay the recipient a discounted lump sum in exchange. This system of selling compensation for lump sum benefits the recipient by allowing access to money up front. And of course, this arrangement also benefits the company that purchases the compensation at a discount.

Many people pay off their credit card loans and other high-interest debts. This helps them reduce interest costs relieving themselves of stress. Others pay their mortgages, stop foreclosures, make renovations and buy homes. May people sell their compensations to pay for medical expenses. Others use their structured settlements for education expenses. They pay tuition fees and settle for a bright future. So, weigh all the options before you take any decisions. What these recipients who are selling their compensations need to be aware of is that there are many predator companies that many take advantage of their hour of need and hand them less than fair deals.

Structured settlement companies to trust

Here are a few companies that have been in the business for decades now. Their representatives present your case in the court. The judge arrives at an agreement and then the cash is disbursed.

But first, you should know that there are factors to consider while selling the compensation. There are two kinds of structured settlement companies – the Brokers and Direct Funded ones. The annuity brokers are trained in structured payments. They can aid the entire process of gaining full payment or an advance against the compensation. Then there are direct Direct-funded companies that have their own sources of capital. These are free to make decisions on the purchase of compensations. Other companies use third party guarantors which can lead to delays.

Here are a few reviews of the companies you should consider to sell your structured settlement

  1. J.G. Wentworth Structured Settlements are the largest annuity and compensation purchaser in the country for 20 years. They offer the best price guarantee and customized all transactions to fit your needs. This company can help you get the cash you need now. They are the go-to resource for the people looking to access their future cash now. Since J.G. Wentworth bought their first compensation payment stream, they have helped thousands of people sell more than $8 billion in future payments.
  2. Olive Branch Funding is highly experienced in this field and provide money upfront in exchange for future compensations, annuity payments and lottery award, fast. They offer personalized services and are committed to offering cash solutions to your needs, now.
  3. SenecaOne offer personalized services to solving your immediate cash needs and help discover long-term solutions. They come with a deep understanding of their client’s unique financial needs. Thus, they deal one on one and one at a time.SenecaOne is a structured settlement and annuity purchasing company that offers payment plans customized to the recipients. This gives the control to the customer on how much or how little they sell.

Before you sell, get quotes and compare from several companies, they consider many factors before they decide the price of your compensation. Find out the purchase price before selling, note the time value. The time value factors in the idea that this money is available now. Thus, more valuable than the money available later, as you can use, invest and earn off it – now. Mind the duration of settlement, ensure that they pay quickly. Note the timing of the payments as the sooner the compensation is received, the higher the purchase price you obtain. The total amount of settlement affects the price you will receive, the lower value the more difficult it is to sell for a lump sum. Know thes urrender charges or fees, paid when selling or transferring a compensation. You will also pay a legal fee, broker fee other fees.…

How Much is My House Worth?

In a fluctuating mortgage and residential real estate environment, it can be difficult to determine the true cost of your home. Unless you have vast real estate experience, seeking avenues of assessing the true value of your most precious investment can be confusing. Hence, here are important tips for getting your true home real estate value.

How Much is My House Worth

  1. Find a Real Estate Agent

I would talk to at least three real estate agents to get a good estimate of your home’s worth before placing it on the market.
Don’t be amazed if you get three different estimates. Use your best judgment to see which estimate is the best.

  1. Get exIndependent Real Estate Appraiser

An experienced property appraiser who is independent can provide an educated estimate on the value of your home. Call several independent appraisers in town and ask them of their cost of an appraisal and experience. Choose an appraiser that best meets your needs and budget.

When you are seeking on the value of your home, usually you are looking to sell to upgrade or even downgrade your current home. Often in doing so there are unforeseen costs and fees. This can mean more out of pocket expenses than you were hoping to have to cover. Because of  this, your real estate agent or mortgage lender my suggest selling your annuity to their firm, or to someone they are in contact with. Be careful as the process is very complicated and you could end up with far less money that you deserved. Don’t take chances. Get your complete analysis from Washington Accord before selling your annuity payments to a third party.

  1. Evaluate Comparable Homes

You can also look at comparable home sales in your neighborhood. It is important to evaluate homes similar to yours for an ideal comparison of value.

  1. Search the World Wide Web

The popularity of the World Wide Web has revolutionized the mortgage loan and real estate market. Thus, you can find a lot of information relating to anything real estate. There are many internet real estate websites to check prices of homes in your area. These websites are a good resource for the average user, no previous real estate experience is necessary.

  1. Investigate Adjustments in Area Prices

Housing pricing data is available from credible sources, such as the Case-Shiller index, the Office of Federal Housing Enterprise Oversight, and the National Association of Realtors. The home prices are in broad strokes, but you can get a rough estimate of home price changes in your area.

On the other hand, you can get local area pricing information from the Multiple Listing Service (MLS), accessible through your real estate agent. Also, you go to your county’s property appraiser’s office and get detailed home sales information of comparable homes in your neighborhood.

Resources:

https://www.washingtonaccord.org/annuities/