What Is an Annuity And Should I Sell My Payments?
An annuity is an investment account that will grow your money over time and, at a designated begin, begin issuing payments back to the owner. Insurance companies issue annuities, exchanging your money for a guarantee on your investment years down the line. Unlike certain retirement accounts, there is no limit on the amount a person can contribute to an annuity.
Sometimes, however, life gets in the way, and an account owner may need the lump sum immediately, rather than waiting years for a return on their investment. When people decide to sell annuity payments — whether current or future — they are selling the rights to some or all of their future periodic payments. Annuity payments may result from:
- a large, paid-up life insurance policy
- a retirement account
- an insurance settlement
- a structured settlement from a successful lawsuit
- a trust fund
There are several different types of annuity payments – some provide a guaranteed income for life, while others are for a specified period. Sometimes life changes may require you to access your money now in a cash, lump sum payment instead of waiting for your smaller, periodic payments.
Fortunately, annuities are assets that can be valued and sold on the secondary market to a finance firm that specializes in factoring. CBC Settlement Funding can provide you with cash in exchange for selling some or all of your future payments rights. By selling your future payments in exchange for an immediate large cash lump sum, you can better meet your current financial needs.
About Annuity Payouts
Annuities have been around since the early 1800s, but have recently grown in popularity for several reasons. First, there has been a significant increase in lawsuit settlement amounts. Secondly, recent tax code changes have made it advantageous to receive money in this fashion.
Selling annuity payments, also known as an “annuity transfer,” is an exchange of your steady stream of periodic payments for one large lump sum of cash immediately. Account owners may sell their annuity in its entirety, or in part, which is called a partial sale. The lump sum will be less than the total that you would have received by the end of the payment period. However, a total or partial sale means you will have a large amount of money now rather than receiving small payments over an extended period of time.
Reasons to Sell Your Annuity
There are several good reasons for selling annuities for a lump sum of cash. If you are facing sudden, unexpected expenses, for example, it makes sense to seek an annuity payout such as getting cash for a structured settlement payment. It is also possible that you may have a business opportunity that needs to be acted upon right away.
Other reasons for selling some or all of your payments include:
- Seizing an investment opportunity
- Funding an education
- Paying for surgery or other medical bills
- Eliminating debt
- Repairing or remodeling a home
- Loss of employment
The Annuity Sale Process
Whatever the reason, selling is an easy process. Almost all states have laws in place asserting your legal right to transfer your payments to another person or business entity.
The sale process includes a few steps:
- Ask for Price Quotes – Annuity purchasing companies should offer price quotes with a low discount rate. CBC Settlement Funding always provides competitive price quotes with no strings attached.
- Choose a Buyer – Look for a buyer that is accredited with multiple associations and has positive reviews online. For example, CBC Settlement Funding has an A+ rating from the Better Business Bureau.
- File Paperwork – Whether you are selling a Single Premium Investment Annuity or a Structured Settlement Annuity, all CBC requires is a copy of the contract or settlement and personal identification documents to get started.
- Get Judicial Approval – In most cases, selling is a legal process. For example, in the case of a Structured Settlement Annuity, you also need to file a court petition so that a judge can approve the transaction. The legal staff at CBC will deal with all court filings and appearances on your behalf.
In order to avoid scams, it’s extremely important to vet potential buyers before you choose one. Some red flags include:
- A lack of accreditations with professional organizations
- High-pressure sales tactics
- Low ratings with groups like the Better Business Bureau
- Poor ratings on websites like Yelp
- Pushing you to sell your entire account
Cash Value of Annuity Payments
The total cash amount you will receive when you sell an annuity depends on several factors, including the total amount of the payment you are selling, current interest rates, inflation rates, how much you’ve been paid to date, and the reliability of the payer.
CBC Settlement Funding
At CBC Settlement Funding, our staff will take care of the legal filings and process the paperwork for you, should you choose to sell your structured settlement, annuity, or single premium investment payments to us. You may receive your payout in a cashier’s check, or the funds can be transferred electronically to your personal account.