Facts About Cashing in Your Annuity

If you’ve endured a lengthy and tedious legal journey that resulted in a structured settlement awarded in your favor, you may want to know if you can get cash for it. In short, you can. But before you go to cash in your annuity, you’ll want to make sure you have the necessary information to make a knowledgeable decision. The legal process can take months. So, you won’t get your cash the next day. So, be wary of any buyer who makes this promise.

Not all situations for structured settlements work well for everyone. While it can be convenient and comes with advantages like tax and interest, you may find an opportunity to use that annuity cash to invest in a better opportunity that could earn you more than your settlement. When you want to spend your money the way you prefer, then selling annuity payments for cash may be the way to go.

Government Guidelines for Structured Settlements

Many legal advocates and U.S. courts grant settlements in the form of annuities rather than lump sums. Annuities are investment tools that provide a place for you to secure your tax-free money, receiving distributions of it equally over time, all while earning interest. Because most settlements derive from injury cases that leave the plaintiff unable to secure their usual income, the periodic payments of annuities distribute similarly to regular income, ensuring financial security for years to come.

However, the U.S. government understands that many settlement recipients may want to get cash from their structured payments. And they have the right to do so. But they also recognize that some unethical buyers of annuities can take advantage of structured settlement owners, and they’ve set up regulations for selling annuities. These regulations are meant to help you and other injured parties, not hinder you.

Finding a Buyer and Negotiating Terms

When selling annuity payments, you’ll want to start by finding the right buyer for your settlements. You choose your bank based on its reputation and your insurance company based on recommendations. In the same way, you’ll find an annuity buyer through research and referrals. Start by asking your lawyer for recommendations from previous clients. Conduct research on those organizations by checking with the BBB and other internet resources to verify their reputation.

Upon making initial contact, ask them many questions, listen carefully to their answers, and weigh your options. Be wary of any potential buyer who can’t answer questions for you right away and must call you back. When you find one you want to work with, negotiate for the best terms. You’ll still likely have to pay their fees as well. Pay close, careful attention to the terms they offer. And don’t hesitate to ask them any questions or request to make any upfront changes.

Selling annuity payments for cash is a common practice among awardees of structured settlements. But be aware of government regulations and how to get the best terms from a reputable buyer.