An annuity is a fixed or variable sum of money paid in increments over a predetermined period of time.
The purpose of an annuity is to provide a steady stream of income for the recipient. Annuities are used in a wide array of applications, from retirement plans to legal settlements to survivor benefits and more.
In addition, some inheritances can be set up as annuities, and some annuities themselves can be passed down to a beneficiary. In many annuities, the recipient collects the same amount of money each year, although some annuity contracts can have variable payments.
Why Sell My Annuity Payments?
Life may have changed quite a bit since you first set up your annuity. If so, it may be a good time to look at your annuity a bit differently.
The primary goal of selling annuity payments is to turn all or some of your future annuity payments into one lump sum, allowing you to put your money to good use today rather than waiting – whether it’s for a bigger home, a more reliable car, tuition, or to pay off debt.
Find out how Peachtree Financial Solutions can help you cash in all or part of your annuity payments.
Types of Annuities
An annuity can be created for many different reasons, and Peachtree works with recipients of nearly every kind of annuity. The most common type is a Single Premium Annuity and it can be paid out in two different ways:
Single Premium Immediate Annuities
These annuities begin paying out within a year of being purchased and are typically purchased with a one-time investment, either from the purchaser’s personal savings, a retirement plan, or an inheritance.
Single Premium Deferred Annuities
This type of annuity is set to be paid out at a later date. Similar to Single Premium Annuities (SPIA), this annuity type is purchased with a one-time investment, either from the purchaser’s personal savings, a retirement plan, or an inheritance.
Deferred Vs. Immediate Annuities
An immediate annuity offers a steady, predictable income starting within a year of purchasing, while also allowing you to determine the payback period and riders attached.
Deferred annuities delay the payment until the investor elects to begin receiving them. Deferred annuities consist of first investing money into an account, and an income phase when it is converted into an annuity and payments are received.
Although most retirement plans have transitioned to contribution plans like 401(k) and IRAs, annuities are still offered as part of government and other legacy pension options. It’s up to the retiree to determine how the payout will be made, and how any survivors will benefit from the annuity. Peachtree Financial Solutions cannot purchase payments from pensions or employee-sponsored retirement accounts.
Types of Annuity Payment Structures
The cash that annuities can generate depends on a wide number of factors, from how the economy is performing, to the various riders which were added to it. However, one of the most important factors taken into consideration when selling an annuity is the payment structure you’ve chosen.
There are thousands of different varieties of annuity products and contracts. However, most annuities fall into one of the following general categories of payment structure:
The periodic payments from a fixed annuity are the same for the duration of the term, and are usually funded by a stable rate of interest from the insurer.
Variable annuities are funded by investments that are more prone to fluctuation, such as stocks and bonds. As a result, the periodic payments can vary over time.
The payment structure of your annuity plays a major role in determining whether or not we can purchase your annuity and the amount of the cash lump sum we can offer you. For more information on how your repayment structure will affect your annuity payment sale,please get in touch with one of our representatives.
Guaranteed vs. Life Contingent Annuities
Guaranteed payments will go to your beneficiary in the event that you pass away before all your guaranteed payments are made. Life-contingent payments will only be made as long as you are living. We can purchase both types of payments.
What Is an Annuity Rider?
A rider acts as an amendment to your annuity, in the same way that a rider can modify an insurance policy. It can guarantee income for you or a loved one later in life or help you to prepare for unexpected situations. A financial advisor can work with you to decide if it makes sense to add a rider to your policy to help you protect what matters most.
How Do Riders Affect an Annuity?
Along with payment structure, cash out options are also determined by specific riders that have been put in place on your annuity. Like a traditional insurance policy, riders can be added to annuities. These modify the basic agreement, expanding or restricting the policy to give it the coverage and terms you want.
Medical Annuity Riders
A medical rider changes the scope of your annuity based on health or life events, providing additional benefits should the unexpected occur. Some common medical riders include:
- Death Benefits: In many cases, annuity payout is life contingent, meaning that the insurance company only continues payments for as long as the purchaser is living. A death benefit rider lets your family continue receiving installment payments, or accept the balance of your investment in the form of a cash payout.
- Long Term Care: This rider allows you to access the balance of your investment if you’re transferred to an assisted living community.
- Impaired Risk: If you contract an illness that substantially reduces your life expectancy, an impaired risk rider may increase the monthly payout in the annuity.
- Terminal Illness: In the event of a terminal illness diagnosis, this rider allows you to access a portion or even the remainder of your premium, likely without paying any surrender penalties.
- Unemployment and Disability: Like the terminal illness rider, if you suffer a disability or lose your job, this rider will give you access to your premium. The provider will likely cancel all buy-back fees.
Financial Annuity Riders
Unlike medical riders, financial modifiers adjust your payments due to external factors, such as inflation. These riders can modify the repayment terms, or allow you to access all or a portion of the remaining premium. Each insurance company will offer their own list of financial annuity riders, but some of the most popular include:
- Inflation Adjustment: One potential downfall of a fixed annuity is that the purchasing power of a dollar tends to decrease over time. An inflation-adjusted annuity automatically increases the monthly payment to attempt to compensate for this.
- Commuted Payout: Adding a commuted payout rider to an immediate annuity allows you to withdraw a lump sum should an unexpected need arise. In most cases, this is a time-limited rider, only available during the first few years of payments.
- Variable-Only Riders: Often used to supplement retirement income, a variable annuity gives your investment the best chance of growing, but also comes with certain financial risks like investing in stocks and bonds. To help mitigate the risk, many insurance companies offer special riders:
- Guaranteed Minimum Accumulation Benefit: If, after the growth phase of your annuity, the total value is less than the total premium paid into it, a GMAB rider will adjust the balance to equal the premium, less any withdrawals made.
- Guaranteed Minimum Income Benefit: The GMIB rider allows for a minimum monthly payment regardless of the performance of your annuity.
- Guaranteed Lifetime Withdrawal Benefit: Typically, you have to convert a variable annuity to an immediate fixed annuity to receive an annual income for the rest of your life. The GLWB rider will allow you to draw on your variable annuity without converting it.
What Are the Benefits of Selling Annuity Payments?
Life is unpredictable, and what made financial sense when you purchased your annuity might not be best for you today. Perhaps debt is hurting your credit score, you need instant access to cash to pay medical bills, or you want to make a sound investment like a house or education. Selling payments from annuities for lump sums opens the possibilities and places your financial future in your hands.
What to Consider Before Making a Decision
At Peachtree Financial Solutions, we promise to always explain your options clearly, so that you can make informed decisions every step of the way. If you’re considering selling annuity payments, you should ask yourself a few questions.
- Have my financial needs and goals changed, and are my annuity payments keeping up?
- Do I want to leave money to my heirs?
- Do I want more financial flexibility and control over my assets?
- Is an annuity still the best use of my money today?
Peachtree Financial Solutions does not provide legal, tax, or investment advice. Please contact independent professionals for those services.
If you have more questions, we’re here to discuss them. Call or contact us today!
How Do I Sell My Annuity Payments?
If you’ve decided that selling your annuity payments is the best decision for you and your family, the process can be completed in a few easy steps. A representative will be available to walk you through the process and be sure that you get the money from your future payments when you need it.
Selling all or a portion of your annuity payment stream can be a relatively fast and simple process. The key is to choose a payment purchaser with years of experience working with insurers and an understanding of the many types of annuities available to the market.
Here is an overview of the Peachtree process — a fully streamlined way to get you the money from your future annuity payments and take the next steps toward financial freedom.
Annuity Payment Sale Process
Step 1: Share the Specifics of Your Annuity
Tell your representative a bit about your annuity as well as your financial needs. They can answer any questions you might have about the annuity sale process.
Step 2: Review Your Sale Options
Next, carefully review your options, such as how many payments you’d like to sell, whether you’d like to continue to receive a portion of your periodic payments, and other variables.
Step 3: Receive Your Quote
Your representative will provide a no-obligation quote (typically multiple option quotes) outlining the details of your transaction. Before making your decision, it’s important for you to consider each of the different options available to you.
Step 4: Complete Paperwork
You will need to provide a copy of your annuity and the signed contract, along with other documentation, depending upon your transfer request and the company that issued your annuity.
Step 5: Insurance Company Review
Your representative will provide the required documents to the insurance company that issued your annuity. The insurance company will then make the necessary changes to the policy so that the sale may be completed.
Step 6: Receive Your Money
You will receive your purchase price by check, money transfer, or ACH – sometimes in as little as two weeks. Transaction times vary based on the insurance company and individual circumstances surrounding your annuity transaction.
Peachtree Financial Solutions has helped tens of thousands of people achieve their goals with extensive experience purchasing annuity payment streams. That experience allows us to make the sales process as seamless as possible.
Why Choose Peachtree?
One of the reasons people love working with Peachtree is our team of representatives. Once you begin our annuity payment sale process, we’ll match you with a dedicated representative who’s well-versed in annuities. You’ll work with this same representative to provide consistency throughout the entire process.
What Documentation Do I Need To Sell Annuity Payments?
Behind every customer is a unique story; therefore the documents that can be required are different for each person. Some of the more common documentation needed includes an annuity contract and a benefits letter.
Your dedicated Peachtree representative will work with a team of underwriters to help determine what documentation is needed and how we can help gather the appropriate paperwork.
How Do I Know What My Annuity Is Worth?
Because there are so many different kinds of annuities, and each will typically be further customized for each recipient, there’s no one answer to determine how much we can offer you for your particular annuity payment stream.For example, the size and frequency of your annuity payments, as well as the timing of these payments, can impact our offer quite a bit.
The best way to determine what we can offer you fo your annuity is to talk to a Peachtree representative, who can get you an accurate, no-obligation quote quickly.
Get In Touch
Beginning the annuity payment sale process is incredibly easy. One phone call to a Peachtree representative is all it takes. Contact us today!
Why do people sell their payments?
The simple answer is: Life changes. Payments that come periodically don’t always keep pace with the many challenges and opportunities that arise for all of us. Selling annuity payments can make a difference in your life and help you meet your goals, like moving into a bigger home, buying a more reliable car, paying tuition and other bills, or getting out of debt.
Is selling my annuity payments legitimate?
Do I have to sell all my payments?
Will I have to go to court to sell my payments?
How long does the whole process take?
How much can I expect to receive when I sell annuity payments?
Can I sell a Single-Premium Annuity that I bought myself?
What’s the difference between guaranteed payments and life-contingent payments?
Can I sell my pension or an employer-sponsored retirement account?
Are there any hidden fees?