Investing in annuities, such as the fixed annuity, is not a “road of no return.” In contrast to popular belief, you can sell your annuity contracts when you find it necessary.
Most annuity owners function think that once they had purchased or inherited an annuity, they are stuck with the annuity until the contract expires. You should know that you could sell your annuity and that today, doing so is a lot easier than it was years ago.
Why You Would Want to Sell Your Annuity
Younger annuity owners generally sell their annuity contracts because they want to get a lump sum payment instead of receiving a monthly income. Because they are still young, they do not have to save for long term goals yet. Older annuity owners, on the other hand, generally do not sell their annuities because they are saving for a long-term goal – that is, saving for their retirement.
You might also want to sell your annuity because you want to purchase a particular asset –like a house. In this case, you might need the amount of money that you can get if you sell your annuity.
Selling your annuity will give you money immediately. Because of this, it can be one of your choices so that you can pay off your debts and current bills.
Selling Your Annuity on the Secondary Market
The secondary market is the market where owned securities are sold to other investors rather than to the insurance company that issued the asset. In the secondary market, the prospective seller of annuity transacts with an interested investor to settle the terms of the purchase. These investors are usually looking to buy annuities at a discounted price or to qualify for annuity payments.
Surrendering Your Annuity Contract
You may also choose to surrender or withdraw your annuity account from the insurance company before the maturity date of your contract. If you do this, however, the issuing insurance company will hold you liable for a particular withdrawal charge. The withdrawal charge is a feature used to protect the investment of the insurance company in you annuity.
Be Guided Before You Sell
Make sure that you get all the necessary guidance and advice before you decide to sell your annuity. Review your annuity contract and weigh the differences in advantages between keeping your annuity and selling it out to interested investors. Compare annuity quotes from various sources. You also have to make sure that your issuing insurance company is willing to work with you. If you eventually decide to sell your annuity, you have to keep in mind that you will not get the full value out of your annuity account.
With all things said, it does not mean that you should sell something just because you are allowed to do so. Before selling your fixed annuity payment and contract, it is of utmost importance for you to review your goals and your expectations before you decide what to do. Be careful in weighing the advantages and the disadvantages of selling your annuity. Remember, once you have sold it, you cannot get it back.
Some deals look great and seem to be too good to be real. Read and review the proposal for several times. Always be cautious when handling transactions. After all, not everything is as good as it looks. As stated in the title of this article, look before you leap.
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