05 Jan 5 Steps on How to Sell Your Annuity or Structured Settlement
Whether you need to pay off credit card debt, medical bills, or student loans, or you’re just a little light on cash, selling an annuity is a great way to come up with the funds you need quickly. The first thing you’ll want to do is determine how much money you need and sell at least enough to cover that. This amount will, of course, range dramatically, depending on your situation.
Step 1: Determine How Much Money You Need
Counting only those households carrying debt, on average each U.S. household has $16,140 in credit card debt. The average American has $1,766 in overdue medical debt, and the average class of 2015 graduate will have to pay back a little more than $35,000 in student loan debt. Therefore, it’s important to first consider how much debt or other expenses you have, so you know how much you’ll need once you sell your annuity.
Step 2: Seek Financial and Legal Advice
One of the next things you should do when considering selling an annuity is seek professional financial and legal advice. Over two-thirds of states have laws that allow the sale of structured settlements and insurance payments. Federal law HR 2884, which took effect on July 1, 2002, provides a safe harbor for any individual wishing to cash in their payments.
Step 3: Find a Buyer for Your Annuity
After you’ve thoroughly analyzed your situation, the next step is finding a company to which you can sell your annuity. Keep in mind, you will have to pay fees to get the money you need. A typical annuity is subject to taxes and a 10% early-withdrawal penalty if it’s cashed in before the age of 59½.
Step 4: Complete the Process
Even after agreeing to a deal with a company in principle, you’re still not quite done. In order to sell your annuity, you will need a court’s approval. This means that the process could take anywhere between 30 to 90 days to complete. This is done to help protect consumers from predatory practices.
Step 5: Use the Money as You See Fit
Once this has been approved you’ll be able to receive your money and use it how you see fit. After all is said and done, you’ll more than likely be glad with your decision. In fact, 92% of people are satisfied with their decision to sell their annuity.