You Have Made The Decision To Sell

As it was said early, since you have made the decision to sell your annuity, it is a good idea to research your options in order for you to make good educated choices. Keep in mind, when you made the decision to purchase the annuity you thought about it long and hard, so the decision was made very carefully. Selling the annuity should not be any different, you should put a lot of thought into the decision you are making and make it very carefully, also.

You know annuities are known for providing a steady income and in most cases the income is a guaranteed income. Because that is such an important feature, you will want to consider whether or not you need that steady income. If you are planning on reinvest the money from the annuity, which could earn you a better return, then it is a good idea to sell your annuity. If you require the income provided by the annuity and you are not planning on reinvest the money, then it is not a good idea for you to sell your annuity.

Also there is always the possibility, when you purchased the annuity it was intended to make a large purchase, such as a new home or high dollar car, or even to start a business. Knowing this when you purchased your annuity, you made other arrangements towards your financial security during those retirement years, then by all means sell it, but you will still want to do some research to get the best price you can for your annuity.

To cash out your annuity, you will want to find out the options you have. This will take a phone call to your insurance company so they can tell you your options. Some of the annuities have a “surrender charge”, which will lower the cash value of the annuity because of the early withdrawal. In some cases in order to get the full value of the annuity the owner must receive 5 to 10 years of payments. If you have purchased an annuity by making an upfront payment to receive payments immediately, there is no cash buy out.

The insurance companies offer may not work for you. However it is still important to know the facts, because it will help you understand the costs and benefits when dealing with the secondary market.

You will want to contact a reputable buyer of annuities when you are looking to sell your annuity or even just to get a quote. They will review your policy for free in order to determine its fair market value in the secondary market or even through your insurance company or financial advisor. To receive this analysis you will be under no obligations, so basically “no strings attached”. You will want to work with a company who has the reputation of providing good service and good value to annuity owners whether you deal directly with the company or through your financial advisor.

The buyer should be prepared to explain in detail the nature of your policy and be willing to answer any questions without pressuring you to sell your annuity. When you are selling your annuity on the secondary market, it is important for you to understand you have options. When your insurance company tells you, you are unable to cash out your annuity or you must pay “surrender charges”, these are the types of situations the secondary market can be the most beneficial.

If you are receiving payments from your annuity, do you need part of the payment? Buyers will work with you, you not required to sell the entire annuity you can only sell a portion of it.

You will want to get some tax advice when you sell your annuity, since it can have some significant tax consequences. Fortunately many of the tax consequences are good ones, especially if the sale of the annuity is for the purpose of estate planning. Transferring wealth to your heirs is not considered to be part of estate planning. The majority of your annuity would end up going towards the paying of taxes.

However, if you sell your annuity and purchase stock, bonds and mutual funds, these can be passed on to your heirs income tax free until they choose to cash them. Your annuity could eventually amass a fortune, should your heirs choose to leave them intact for their heirs.