Annuity refers to regular and equal payments that are made to a person from a given investment. The payments in most cases are handed out on monthly, quarterly, annual, or other dates depending on the contractual terms of the particular investment. Annuities are popular among the retiring ages, and that is because they offer continuous and steady income flow. Annuities are categorized depending on how payments are received, that is, immediate or deferred annuity payments. An immediate annuity enables payments to be received as soon as a person ventures into the investment that guarantees the annuity payments. Under deferred annuities, payments can only be received after the initial investment has been allowed to accumulate for a certain period, and this mostly applies for persons who are investing in annuities to take care of their retirement ages.
Annuity selling – partial, and entirety selling options
Any annuity sales option picked by a seller must represent financial sobriety both at the present and future. The contractual options for selling annuities are in many instances straightforward. You just have to be clear on how urgently need the lump sum cash, and also have some considerations for the value of money you that you may receive. Annuity selling options fall under two categories, namely – partial and entirety annuity sales. Under the partial annuity sales agreement, the seller must contractually pick a certain period for which he/she will forego receiving of annuity payments. Payments to the seller can only resume once the agreed annuity deferment period is over. Under the entirety annuity sales agreement, the seller foregoes any future annuity payment, and in return receives lump sum cash for the transaction – that means the end of any scheduled annuity payments. It is important for the seller to assess whether the annuity investment may still have some financial relevance in the future, and if this is not the case, then it can be considered right to sell the annuity payments under the entirety options.
How to sell annuity payments
Annuities are considered a good form of financial investment, and for this reason, it is rare to have a situation where it is taking too long before you strike a favorable annuity sales agreement. However, you have to be careful with the rates you are offered, and that means taking care of the value of money you may be about to receive. There are usually two main reasons that drive people into selling their annuity payments. First, it may be possible that the given investment strategy may not live up to the expectations, and secondly, a person may be in urgent need of cash, and it happens that the way to arrive at that cash is by selling annuity stakes. The easiest and perhaps the quickest way to sell your annuity stakes is by consulting a broker.
While trying to sell your annuity stakes at an individual level, you may find it difficult to meet the right buyers who can offer rates that can offer you the right profits. For brokers, it is easy for them to meet many potential annuity buyers, and that is why this option is highly preferred for anybody who would love to dispose of annuity stakes. Brokers do charge an agreed percentage fee for any annuity stake they sell, and it is therefore upon you the seller to negotiate for rates that represent the true value of your annuity investment. The advantage of consulting brokers is that they are quick when it comes to handling the paperwork that revolves around annuity sales. If you try selling your annuities by meeting the individual buyers, it may even take you over a month to clear up the process, and that may not be a good idea for somebody who is in urgent need for lump sum cash.
Reasons for selling annuity
Your decision to sell your annuity stakes should rise out of an urgent need you have for cash. Therefore, it is advised that serious thoughts and judgment should apply before the final decision of selling annuity payments is made. Selling your annuities for lump sum cash can give you the financial freedom which you can use to take care of your financial needs. The instances which are regarded safe to sell annuity payments are when there is a serious debt that needs to be settled if you want to scale down your mortgage commitments or settle medical bills that are spiraling out of control.