Top Reasons for Selling Annuity Payments

by Rob J. Quality Links

Life changes constantly, and so do your financial needs. While some events can be anticipated, others happen unexpectedly. It's best to have cash on hand in case of emergencies or when you need to make major purchases. Without available funds, your options are limited. Loans come with interest, and if your credit score isn't high enough, your chance of getting approved isn't good.

If you're receiving periodic disbursements from your insurance company or due to a court-mandated agreement, think about getting a one-time lump sum instead of guaranteed annuity payments. Below are some situations where this option can help you.

Purchasing a Home

You're planning to buy a house, but your credit line isn't sufficient to get you qualified for a home loan. A lump sum of money can be just what you need to pay for the property you want. If it isn't large enough for the purchase, you can use it instead as a down payment for a mortgage.

Financing Your Child's College Education

College fees have increased significantly over the past years. Instead of taking out student loans, which can become a burden, why not sell a portion of your structured payments to pay for your child's university education.

Paying Off or Reducing Debt

Helping you get out of debt is one of the best reasons to sell your annuity. You can use the lump sum to lower or eliminate your outstanding credit card bills or personal loans.

Starting a Business

Have you always wanted to become your own boss? With a portion of your structured payment, you have the opportunity to get your new business up and running.

The proceeds from the sale of structured settlements can be used to invest in the equities market. While this investment method is risky, it delivers higher returns.

Settling Medical Expenses

Hospital bills are often higher than what insurance payouts can cover. This is why medical costs are among the major sources of bankruptcy in the United States. In the event of a health emergency, selling annuity payments can help you take care of your expenses.

People who sell their annuity guaranteed payments don't do it on impulse. They're usually faced with a situation that requires an immediate solution. If you're unsure whether selling your structured settlements (or even a portion of it) is in your best interests, consider speaking to a professional financial advisor.