HomeBusiness PointHow To Sell An...

How To Sell An Annuity On The Secondary Market For Quick Cash?

Annuities are negotiable financial instruments that guarantee a steady income to their holder over a certain period of time. The annuity contracts are sold as products by different financial institutions like insurance company etc. Annuity investments are made as one-off payments or instalments with a view to receiving a fixed payout in a certain interval. Annuity products are mainly bought to secure a fixed income stream during retirement.

The Secondary Market Annuity

A secondary market annuity (SMA) is also the ordinary annuity the only difference is that the secondary market annuity (SMA) holders are willing to sell their annuity in order to receive cash now instead of future. SMAs are sold at a discount to compensate the buyers for paying cash now and receiving payout later. The term secondary market annuity also includes structured settlements and lottery payments. The buyer of the secondary marketing annuity is often the factoring companies who offer immediate lump-sum payment in exchange for a discount. Although selling a secondary market annuity requires court approval. You shouldn’t have any problem getting court approval if you have a proper reason to sell the annuity.

Selling Options

When it comes to selling annuity payments, the annuity holder has a number of options like selling the entire annuity, a number of payouts or, a lump-sum amount. It’s always a good practice to consult a lawyer or, financial advisor before choosing the option. Many countries or provinces require the owner to have a legal advisor.

1. Selling the Entire Annuity

Selling the annuity in its entirety remains the most popular option in the secondary market. This basically means you sell your whole contract and rights to any future payment. Therefore, you are no longer entitled to receive any future payout from your annuity. The annuity holder receives a lump-sum amount to meet his/her urgent financial needs whereas the buyer which is often the factoring company receives the advantage to buy the annuity at a discounted price and make a profit out of the transaction.

2. Selling A Number of Payouts

The annuitant can sell a specific number of payouts to the buyer. If an annuity holder needs some cash immediately to meet some urgent financial needs but doesn’t need the entire annuity amount now. In this case, he may choose this option. For example, if the annuity is supposed to make a yearly payout over the next 20 years and the annuitant needs money equal to 5 payouts, he may sell 5 years payment at a discount. In this case, his payout will stop for 5 years and resume after five years. He will keep receiving the payment for the next 15 years as per the agreement.

3. Selling a Lump Sum Amount

The annuity holder can also sell a portion of his/her future payouts in exchange for receiving a specific amount of money now. This is slightly different from the concept of selling a specific number of payouts. The major difference is that the transaction is based upon a specific amount rather than a number of future payouts. The owner stops receiving annuity payments until the specified amount is repaid to the buyer. After the repayment, the annuitant resume receiving the annuity payouts as usual.

The Annuity Selling Process

Selling an annuity is pretty straightforward in most cases. But in some situations, you may have to go through some extra administrations. Here is a list of processes an annuity holder needs to follow in order to sell his/her annuity on a secondary market.

Step 1 – Determine Your Financial Needs

At the very first stage, you need to determine your financial needs in order to decide whether you are selling your entire annuity or part of it. If you are to sell your annuity partially, then how much?

Step 2 – Do Your Homework and Research Buyers

You should always start by doing some ground research. All information is readily available online these days. A simple google search can help you find reputable buyers, their contact details, customer feedback etc. You can also consult a good financial advisor or an attorney specializing in this field as they can give you deep insight tailored to your situations.

Step 3 – Get a Free Quotes

After choosing the best buyers, start contacting them and asking for free quotes. You can normally request your free quotes via their websites. The company representatives will call you to discuss further regarding their offer. Once you have received a number of offers, compare and contrast them to figure out the option that serves your interest the best. Normally, you should prefer one easy to understand and the company is willing to disclose all of the terms and conditions without any hesitation.

Step 4 – Complete Paperwork

After you have selected the best quote, your buyer and insurance company will process the documentation. Once you have completed all these, the remaining process will take a few weeks normally four to five weeks.

Documents You’ll Need to Sell Your Structured Settlement:

  • Two ID proofs
  • A properly filled up application form
  • Your original annuity contract
  • Release agreement

Step 5 – Schedule a Court hearing

If you are selling a structured settlement, it’s mandatory for you to get court approval. After completing the paperwork, your attorney will get a court date to hear your request. If the judge is satisfied with your reason to sell your annuity assets and gives you permission, your lawyer will arrange the payment for you.

Step 6: Get Approved and Receive Your Money

The insurance company that sold you the annuity product, needs to agree and approve the transaction of selling the commercial annuity. As long as you got the court approval or, the sale is legal and the buyer is reliable to do business with, the insurer wouldn’t complain and give you the approval you need.

Remember, selling your future payment for present gain is always attached to sacrificing the future for the present. Therefore, you need to think critically about whether or not you really need to sell your annuity payment.

Check out: How to buy Technology Applications in 2021

Most Popular

More from Author

Unleashing Efficiency: Exploring Features of the Best Workflow Automation Software

In the intricate tapestry of modern business operations, the adoption of...

Choosing Loans with No Credit Check

Nobody decides to take a loan without a good reason. There...

Features and Benefits of Payroll Outsourcing in 2024

Today more companies and businesses recognize the benefits of payroll outsourcing...

Sitting Pretty: A Comprehensive Guide to Upholstery Materials in Office Chairs

Choosing the right office chair involves more than just considering ergonomic...

Read Now

Best Options Trading Services: Navigating the Financial Frontier

Options trading is an exciting yet complex realm within the financial market. As more individuals delve into this space to diversify their investment portfolios, the choice of the right options trading service becomes paramount. This article aims to guide you through the process of selecting the best...

4 Tips for Problem Solving Your LLM Issues

Artificial intelligence is reshaping the world around us. The technology has developed rapidly over the past few years and now looks set to completely transform the way in which we live our lives. Large language models (LLMs have been hugely important in the recent AI surge. However, like...

How Technology Enhances Efficiency in Modern Sales Processes

You're navigating the fast-paced world of sales, and you understand that efficiency is key. But are you leveraging modern technology to its fullest potential? Uncover how tech advancements are revolutionizing sales processes, driving efficiency, and giving salespeople that crucial competitive edge. Let's dive in and explore the...

A Thorough Guide to Perfecting Your Website to Promote Engagement

Regardless of your website's unique purpose, it must generate engagement among its audience to sustain your business or brand. If you have experienced periods of low engagement, you know first-hand just how seemingly impossible it can feel to find a way to make your website exciting again....

Why Investing in Marketing Strategy Services Is a Smart Move

Business owners often struggle when it comes to creating an effective marketing strategy. This is especially true when it comes to lead generation and creating sufficient revenue. Unfortunately, even the smallest companies can suffer from a bad marketing strategy. A business that is unable to generate sales is...

4 Tips for Navigating Small Business Success in 2023

Regardless of your business size, surviving the competitive landscape demands a flawless branding strategy. Unlike larger brands with ample budgets, start-ups, and small businesses must craft impactful approaches to amplify visibility. Here are some tips for branding strategies that will help you navigate your small business in...

A Store without Right Kind of Equipment is Incomplete

Store storage is a place that plays a very important role in the success of a business. If you can manage equipment properly, then your business will continue to run smoothly without experiencing any sort of problem. But the problem is, often store maintenance and management are...

7 Best Employee Scheduling Software for Small Business

Today, we're diving into a world that might not be as exciting as superheroes or thrilling adventures, but trust me, it's a game-changer for small businesses. We're talking about employee scheduling software. Sounds a bit technical, right? Don't worry; we'll simplify employee scheduling software for small business...

Best Software Tools for Glass Business

Find the best business software to run your glass business. Also, we have listed some top software with features, benefits, pricing, and contact details. GlassManager: Streamline Your Glass Company Operations Are you tired of managing your glass business the hard way? Also, GlassManager is a perfect glass software solution to...

How Explainer Videos Can Boost eCommerce Sales

In today's fast-paced digital landscape, eCommerce has become a dominant force in the business world. The convenience of online shopping has revolutionized the way consumers make purchasing decisions. However, as eCommerce thrives, competition among online retailers has intensified. In this highly competitive environment, the need to stand...

4 Questions to Consider Before You Get Pressure Washer Liability Insurance

If your goal is to own a small business that has the power to improve the curb appeal of commercial and residential properties, starting a pressure washing company is a good idea. In fact, this is a growing industry, as the market size increased by 9.4% within...

What Makes These Sleek Modern Restaurant Booths a Must-Have?

When dining out, the ambiance of a restaurant plays a crucial part in improving customer experience. One element that can truly elevate a dining space's aesthetics and comfort is sleek modern restaurant booths. These chic seating options have become increasingly popular among restaurateurs and diners thanks to...