Questions to Ask Before Selling Annuity

Selling lottery payments

If you are looking for ways to reduce debt or invest your money wisely, you may consider the opportunity you have to sell your structured settlements. If you are thinking ‘I’ll sell my annuity payments lump sum’ then that means that you will have access to cash now instead of having to wait for the monthly or yearly installments that most settlements ensue. There’s pros and cons to selling or not selling of course.

Why sell my annuity payments lump sum?
There’s a few good reasons to sell annuity payments. Here are a few things that you could do by opting for a lump sum:

  • Pay off debt
  • Start a business
  • Purchase a home
  • Pay for college tuition for your kids or yourself
  • Pay medical bills
  • Travel
  • Pay off high interest credit cards

These are just a couple of things that can be done with a lump sum payment and might make your life a little easier to live.

Will I get less if I sell my annuity payments lump sum?
There are fees associated with getting all your money at the same time instead of having it spread over a period of time. However, it may all even out over time. If you end up deciding to use your lump sum to pay off high interest loans or credit cards, for example, you may pay fees for the lump sum but what you won’t pay in interest for your debt will equal out in the long run, if not actually save you money.

How soon will I get my money if I sell my annuity payments lump sum?
This is one of the best things about getting a lump sum. Getting settlement payments over a period of time can take a long time to even start; even years later depending on the type of settlement you are getting. Getting a lump sum can only a matter of weeks to get, so as soon as the process gets approved you can start making your plans for how you will invest your money.

Would selling be a safe bet to place or is it risky?
Annuity payments are only as good as the company that is backing them. If you choose to sell, then you will want to make sure you do all the research about the company that you are going to be receiving your money from. There are only risks involved in the company is risky. A judge and courts should be involved in the whole process to make sure that everything stays above water and legal.

Is there a difference between buying mutual funds or annuity?
Each of the options have pros and cons related to them, as is the way with everything. Mutual funds tend to be a little less expensive but they do not offer any more guarantee than an annuity. Each idea has specific features about it that can be furthered explained by a professional financial adviser.

If I don’t sell, will the annuity be adjusted according to inflation?
There is a chance that you will receive less per year depending on inflation but that will generally only happen for a long term annuity. Short term annuity, meaning between 10 to 15 years, will usually be safe under inflation protection.

Keep in mind that each company will have different policies and stands when it comes to how they go about buying your annuity so make sure that you know all of the details and read the fine printed before signing on the dotted line. There may be things in there that you don’t agree with or want changed and depending on the company, they may be open to negotiation. In fact, the amount that they offer you in the first place may be able to be negotiated so that you can get a better rate. Doing your own research and knowing what you are getting into before applying or appealing to a annuity buying company is a good idea so that you will know if something doesn’t sound quite right. It’s important to be informed and educated when it comes to things like this, especially when a lot of money is involved. You should have a financial adviser with you every step of the way to help guide you and keep your best interests in mind.

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