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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. |