Annuity is a fixed or variable amount of money paid to the annuitant or a beneficially every year by an insurance company. The Annuitant places a lump sum or periodic sum with the insurance company, and as a result receives an amount for a specified period of time from the insurance company. Selling of annuities involves taking a large amount of the money upfront then using the future payments as guarantee. Annuities can be structured making them flexible to meet annuitant’s needs
Fixed annuities are safer since no matter what happens with the economy the amount does not change. Where else, with variable annuities when the market is booming the amount increases and vice versa. A lot of people prefer fixed annuities because they are more certain.
Questions one needs to ask before selling annuities early
Ask yourself why you want to sell, is there any advantage of selling the annuity early, what are your financial needs, how much lump sum do you need, what are the terms of sale, will your rights well protected according to the laws of your state.
Need to note that by selling the annuity now, a smaller amount will be got as compared to the cumulative future amount. So selling annuities for profit is out of the equation.
Some annuities provide tax shelter but any distributions like selling them are taxable so the seller has to put the tax burden in to consideration.
Factors to consider when selling annuities
It is important to find out whether the annuity is transferable or not. If it is not transferable then it cannot be sold unless you list it as an asset and apply for a loan from a bank. For structured annuities make sure that your state has a structured annuity protection law. It is good to get advice from a finance expert in order to know the value of your annuity. Some annuities are very complex and needs an expert to evaluate them.
Don’t rush when shopping for buyers. An agent or a broker can help in searching for a buyer and also one can look in to websites to see and compare different offers. Make comparisons of different buyers then select the best offer.
Make sure all the paper work is well done with everything very well clarified; this is why you need a trusted broker, financial expert or an attorney.
There are several annuity selling methods: in straight purchase, the buyer gives one lump sum and the entire annuity is transferred to the buyer, in partial purchase only the immediate payments are transferred but not the future ones, in split purchase a portion of the periodic payments is sold and the remainder is received by the seller and lastly in reverse purchase the last years of the payments are sold.
The annuitant has to make a decision on the most appropriate method to sell the annuity. Sell annuities when in desperate financial situation as the future amount is bigger than the immediate lump sum. The advantage of selling annuities early is that unfavorable uncertainties are eliminated in cases of variable annuities. Lastly never appear desperate, let the potential buyers know that you are just making enquiries for knowledge purpose. At the end of the day you need the most competitive offer.
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The writer offers the best tips on Selling annuities for profit as well as gives Indians leads to some of the credible companies that Selling annuities for lump sum to is easy and very flexible. The writer is an expert in this field and will always offer you the best.
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