How to Get Immediate Cash for Your Annuity

If you find yourself financially strapped for any reason, you can get immediate cash for your annuity payments. Follow the steps below to find out how to cash in on your annuity payments in the United States.

Read Your Contract First. Review the details of your annuity contract. Pay attention to the full disclosure clause on your agreement. It’s important that you understand that you are selling the correct portion of your annuity payments for a lump sum cash payment.

  • If you aren't sure what the contract statements mean, see a lawyer, financial adviser or a community budget center helper for a clear explanation.

Don’t cash out your annuity if your contract states that you are allowed withdraw a certain percentage of your initial investment without incurring a penalty. For example, if you initially invested $200,000 and you are allowed to withdraw up to 5% per year, you could simply take out $10,000. If you take that option, you get some immediate cash and your annuity remains intact.

Understand the process. If you are seeking a lump sum of cash in lieu of structured payments, you are in effect signing over all your rights to receive your future annuity payments to someone else—–the entity that is giving you the lump sum cash.

  • Be aware that in the long term, your annuity is worth much more if you receive structured payments according to the original contract. Talk to your insurance agent to determine the exact worth of your annuity—–you may decide to ride out your immediate cash flow crisis instead of cashing in.

Research companies that offer cash for annuity payments. You will never receive the full value, of course, but companies have a wide range of options—–anywhere from 60 to 85% of the worth of your annuity. Getting 85% of your annuity’s worth is obviously more desirable than getting 60% of its worth.

Have your attorney review all documents before you consent to any agreement. This will help to ensure that you understand what is happening and that it is done correctly.

Play it safe and retain some of your annuity. You are not usually required to sell all of it. You can decide to sell a designated portion of it and still get annuity payments in the future. The company you sell to will still make a profit, but at least you’ll have some immediate cash and still be able to look forward to some retirement income.


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