Cash For Annuity Payment Tips And Information

There are a variety of reasons why getting the cash for annuity payment can be a wise idea today. I know that I often get asked, why would anyone want to sell their guaranteed annuity payments, or sell their structured settlement?

I can definitely understand the sentiment, but what happens when you need the money for your children's college education? Or to pay off the unexpected medical bills that insurance didn't cover? Perhaps it is that new home you've been trying to get for years now, along with a number of other possibilities. Financial situations change in everyone's life.

Another big reason that I've heard people mention in the past couple of years is the uncertainty of the company holding the annuity actually being in business over the lifetime of the payouts. What if they go down in flames like so many financial companies recently?

So, if you have decided you want to sell and receive cash for annuity payments, what should you look for? What do you need to be aware of? While there are several factors you'll want to be aware of, the most important of these include: settlement agreement process, annuity value, transaction time and the court process.

Settlement Agreement Process

Selling your structured settlement or annuity is a right that can't be taken away from you provided you meet court approval. More on that later. Under the Structured Settlement Protection Act, which most every state has on its books, you'll need to meet some common requirements:

1. You get a letter telling you that you should seek independent legal and professional advice before selling your annuity.

2. You are provided with full details and disclosure on the financial aspects of the sale.

3. You get a number of days for a cooling off period of time. During this time you can cancel the pending transaction without penalty.

4. You pass the court hearing on the sale of your payments.      

Annuity Value

Establishing the actual value of your annuity is a huge part of the process. To that end you should get multiple settlement quotes. Don't simply accept the first offer.

Determining the discounted value of the annuity will help you in knowing whether you should really sell or not. For example, if the actual market price for any annuity is less than its current value, then you would be wise in holding onto it instead of selling it.

Keep in mind though, you can sell a portion of the annuity for cash. You do not have to sell all of it. This can be a huge advantage for you. To give you an idea of what I mean, let's say you sold 1/4 of your settlement. You would get a payment for that amount up front today, yet also continue receiving the amount of payments on the remaining 75% each month as well. 

Time

People always want to know how much time it will take to get any cash for annuity payment. Very understandable as well. Be prepared for the entire process to take at least 60-90 days. It simply does not happen overnight. There are so many legal requirements and mandates that must be met. It all takes time. If you see someone advertising that they can get you the money in only a couple of weeks, don't buy into it.

Court Process

Finally, there is a court hearing in which a judge will approve or deny the sale. In most every case the judge approves the sale as long as you have shown the court you have financial needs for the money, which is why you are selling the annuity to start with. I've seen very few cases in which the court did not approve the sale and in all instances it was due to the lack of a financial need for selling in the first place.

Here's a quick video on the difference in taking cash for annuity payment in the lottery.