Structured Settlement

Sell Annuity: What to Avoid When Selling

If you make the decision to sell your annuity, there are some things that you need to watch out for. There can be serious consequences to selling your annuity and in some cases, if your annuity is from a structured settlement, you may not even be able to legally sell it so be sure you get all the facts and then avoid the commonly made mistakes listed below.

Look out for high balling and don’t sell your annuity to the highest bidder. Often when people are desperate for money, they don’t look into all the facts. Brokers make you a high offer to get you under contract and once you have accepted they may change the deal. Even if you can get out of the contract, then you will have lost very valuable time when you were desperate for the money.

Another common mistake is when people believe that they will get their money right away. Often the funding source (company or third party) may tell you that you will get your money in a short period of time when in fact it can take weeks or more. The time that it takes to close on the transfer can vary according to state law. If you are in a different state from the insurance company then that can make a difference as well. In most cases it can take about a month but in some it can take up to four months or more so avoid making the mistake of thinking you are going to get it right away.

Something else to be aware of is that you do not need to sell the entire settlement amount. For example, if you have an emergency and you only need $10,000 but your settlement balance is $150,000, you do not and probably should not sell the entire thing. You can only sell what you need for your emergency and leave the rest to come in their installments as scheduled.

Another common mistake people make when selling their annuities is letting their emotions come in the way of smart decision making. It can be very tempting to want to get all that money up-front, especially if you feel you are in a desperate situation.

Avoid going with an unknown dealer or broker. Be sure you work with a reputable company that doesn’t run off with your money or try to scam you. Check all your facts and don’t be afraid to look into the company. You should also be cautious of anyone that contacts you to offer you a deal through cold calling, emails, etc.