Before selling a settlement, one has to be sure of the decision of parting with a future regular income and realizing it at a much lesser value. Once the lump sum payment is received, it cannot be reversed, i.e. the seller loses his right over the annuity.
Determine the Worth of the Annuity: The first step before trying to sell is to find the discounted value of future cash flows in order to determine the present value of the annuity. This is the price that one should receive on selling the same. In case the market price of the annuity is less than the present value, selling the annuity is not a sensible decision. It would behoove the investor to hold on to the product till the market valuation justifies the sale.
Determine How Much to Sell: The biggest advantage, that a secondary market for annuities has to offer, is the ability to sell a portion of the annuity payments while retaining the rest. For instance, a person may sell 3/4th of his monthly payments for 5 years and get a lump sum amount.
Contact a Buyer: A reputable financial company can determine the fair value of the annuity payments. The company can also inform the person about the necessary documents like: the policy documents, recent copy of the annuity checks - if it is in the payout stage, tax returns and other necessary documents. However, the company will charge a fee for the services rendered.
Direct selling eliminates the middleman and saves fees on the transaction but makes the process of selling, cumbersome. Find a reliable selling company to do it for you. The easiest and most convenient way of selling annuities is to find a reputable company that will do the selling for you. Hiring a reliable third party can assure you that your annuities will reap maximum benefits when sold because they have the sources and experiences to do so. But of course, you will not get the whole profit for the sale. Directly sell your annuities. You can also sell your annuities directly to someone who wants to buy them.
This is not a popular choice of selling annuities because of all the legalities involved. You can research on what it takes to sell your annuities personally or online selling opportunities that will help you to sell annuity payments easily.
Exchange annuities for other annuities. Another way to sell your annuities is through exchange. You can exchange, for example, your annuity that pays-off a smaller monthly income in a long period of time and another person's annuity that pays-off a larger income in a shorter amount of time or vice versa. This will benefit you if you can not sell your settlement in a single lump-sum payment because of the terms of your annuity. You can, in effect, have a better chance of selling your newly acquired annuity in the market.
Using annuities as collateral for loans. This works like the exchange of annuities for other annuities only that it serves as a security for your loan. It is an option you can take that may give you a higher yield on your annuity. (with inputs from kevinsmarketing.com)
In case a person is unable in selling settlements payments for a reasonable price, he can always consider an annuity swap that helps him exchange an unfavorable series of payments for a more suitable one. For instance, one can exchange one's variable annuity payments for fixed payments by entering into a swap. One may also consider using the annuity as collateral in case one needs finances but is unable to sell off the annuity at a reasonable price.
Determine the Worth of the Annuity: The first step before trying to sell is to find the discounted value of future cash flows in order to determine the present value of the annuity. This is the price that one should receive on selling the same. In case the market price of the annuity is less than the present value, selling the annuity is not a sensible decision. It would behoove the investor to hold on to the product till the market valuation justifies the sale.
Determine How Much to Sell: The biggest advantage, that a secondary market for annuities has to offer, is the ability to sell a portion of the annuity payments while retaining the rest. For instance, a person may sell 3/4th of his monthly payments for 5 years and get a lump sum amount.
Contact a Buyer: A reputable financial company can determine the fair value of the annuity payments. The company can also inform the person about the necessary documents like: the policy documents, recent copy of the annuity checks - if it is in the payout stage, tax returns and other necessary documents. However, the company will charge a fee for the services rendered.
Direct selling eliminates the middleman and saves fees on the transaction but makes the process of selling, cumbersome. Find a reliable selling company to do it for you. The easiest and most convenient way of selling annuities is to find a reputable company that will do the selling for you. Hiring a reliable third party can assure you that your annuities will reap maximum benefits when sold because they have the sources and experiences to do so. But of course, you will not get the whole profit for the sale. Directly sell your annuities. You can also sell your annuities directly to someone who wants to buy them.
This is not a popular choice of selling annuities because of all the legalities involved. You can research on what it takes to sell your annuities personally or online selling opportunities that will help you to sell annuity payments easily.
Exchange annuities for other annuities. Another way to sell your annuities is through exchange. You can exchange, for example, your annuity that pays-off a smaller monthly income in a long period of time and another person's annuity that pays-off a larger income in a shorter amount of time or vice versa. This will benefit you if you can not sell your settlement in a single lump-sum payment because of the terms of your annuity. You can, in effect, have a better chance of selling your newly acquired annuity in the market.
Using annuities as collateral for loans. This works like the exchange of annuities for other annuities only that it serves as a security for your loan. It is an option you can take that may give you a higher yield on your annuity. (with inputs from kevinsmarketing.com)
In case a person is unable in selling settlements payments for a reasonable price, he can always consider an annuity swap that helps him exchange an unfavorable series of payments for a more suitable one. For instance, one can exchange one's variable annuity payments for fixed payments by entering into a swap. One may also consider using the annuity as collateral in case one needs finances but is unable to sell off the annuity at a reasonable price.
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