Sell Annuity Payments Calculator | Structured Settlement Calculator Present Value Annuity Due
A lot of questions have inspired this post, particularly questions like how much is my annuity worth if I sell it in an open market.
However, on this post I will have to discuss all the pressing concern as it relates to the process one has to follow to sell annuity payments. Let’s begin by understanding the term annuity.
Annuity – Annuity can be defined as investment made on a long term basis issued by an insurance firm. Annuity can as well be seen as a series of payments made at equal intervals for a specific period of time. To sell annuity payments can be attractive at times, however, annuity is designed to provide aid or protect its owners from the risk of having to outlive their income as it relates to their earning.
In as much as annuities are meant to protect as well as provide cover in the future, some individuals still wishes to sell their annuity for cash, trust me, when you do your due diligence, you will know that there are companies that buy out annuities from willing sellers.
An exemplifying instance of annuity is a situation where a home owner receives an equal payment over the life of the house from his tenants and a car dealer who receives equal payment monthly payment from the car buyer on hire purchase.
If in an instance an investment brings in a return to the investor, returns of a fixed amount for a period of time, this constitute an annuity. This payment could interest payments on bonds etc.
Annuity payment can be certain or contingent. Annuity is certain when the equal payments begin and end at a fixed times, just like the payment on a home purchase with bank loan. Reason is because the payments starts on a fixed date, it will then continue until the period elapses.
Now, annuity is that payment or receipt of a fixed amount each period for a specified number of periods, that explains why it seems to be attractive to most families due to its potency of working as a tax shelter which helps to an original deposit safe.
Reasons People Sell Annuity Payments To Willing Buyers
Selling annuity payments for cash comes with its obvious rewards which is the cash paid, however, it is some sort of relive move, especially when one stock due to cash stress.
The truth about this is that for one to sell annuity payments due to the need to buy a house, start up a business, buy landed properties, pay up for student loans is not bad, since a part of the future annuity is used, perhaps your structured settlement payments will always be there to help you control how to manage your finances.
Want to know the reasons an individual will want to sell their annuity payments? Here are some of them;
- The conditions as well as the activities in the market
- Divorcing can make the couples involved to sell off their annuity payments
- A prominent reason can also be for paying off debt
- If an unexpected/unprepared event happens could lead to selling of annuity
- In an event an individual is injured
- Another is from the effects Inflation has caused to the economy
- Selling to investing in ones personal activities
- To invest in the stock markets, retirement fund etc
- Sell annuity payments to start up a personal business or to assist family member or friends.
- Buying a home or even paying for a vacation.
Reasons people sell annuity payments can be categorized based on their need to sell it off, the above and many more could be a determining factor that could influence that.
How To Sell Annuity Payments?
Questions will arise on how, where or even ways one can sell annuity payments off to willing buyers, however, reason for selling off a structured annuity settlement could be a decision to raise capital. Owners of these annuity can actually decide on the best way to sell their annuity payment for cash, even though contracts in these annuities differs, below are a few options to chose if you want to sell;
- The partial sale method: As the name implies, it is a situation where an annuity owner sells off a part of an annuity plan, it is entirely at the power of the annuity owners to sell. The good part of this is that you get to continue receiving periodic income without the fear of losing out on the tax benefits attached to it.
- An Entire Buyout method: Also as the name implies, in a situation where an annuity owner decides to sell the entire annuity, in essence liquidating the entire investment, the benefits of enjoying periodic payment will be forfeited.
- The Lump Sum Method: When an individual decides to sell annuity payments for cash, you have the opportunity to sell lump sums of the annuity over a specific period of time. The fact is that, this option is the guaranteed source one can obtain income from an annuity plan.
I once got a mail requesting to explain why an individual will sell annuity payments for cash, but then, it is for the cash rewards, meanwhile selling can be a tedious task but then with the aid of experts one can actually sell off easily, even if the owner wants to sell off is retirement annuity.
How Do Annuity Payments Work?
Annuity payments can be made at the beginning or at the end of each period. If the payments are made at the beginning of each period, the annuity is called an annuity due, where payments are made at each period of annuity is called regular or ordinary annuity.
Differed annuity can be referred to as the annuity where the first payment is not made at the beginning or at the end of the first period, but at some later date. However, fore-borne annuity is one when after the last payment is confirmed, the accumulated amount is kept to continue earn more interest for a particular period of time.
The payment interval can be explained as the length of time between successive payments. It could be annually, semi-annually, monthly, weekly, daily or at any other fixed interval, the term annuity actually explains the time between the start of the first period payment and the end of the last periodic payment. The periodic payment is the amount of each payment in Dollars and cents.