How do I Sell My Annuity?

Your first step in the process of: sell my annuity, must be to contact the insurance company that provided it to you in the first place. A lot of these companies have what are known as “surrender charges”; this means that when you sell the annuity, you get less than what it is truly worth. In addition, that value can have a sliding value; if you decide – I want to sell my annuity after only a few years, the surrender value is much less than if you sell it after closer to ten years. Even if you decide not to sell your annuity back to the insurance company, you need to get all of the information on their offer, so you can compare it to other offers you get.

Next, there’s the secondary market for annuity sales. You can go to one of these if your attitude is: I must sell my annuity. Either an insurance broker or financial advisor can lead you to one of the secondary markets. A great thing about them is that they will evaluate your annuity free of charge and tell you what it is worth, and without any special conditions. Now, this is important – if they tell you that an initial charge is required, or try to stipulate some other pre-conditions, go find another buyer. It is always best to get references; make sure that the company has a proven track record of giving good value and service to its customers.

In some cases, when you have the attitude: I want to sell my annuity; your insurance company may say that they can not give you any surrender value for it. This is yet another reason to go to the secondary market to sell it. Another real plus to this market is that you can vary just how you sell your annuity – you can sell just a portion of it, rather than all of it. As an example, if you have annuity that provides you with $10,000 a month, and you only need $5,000, you could sell half of your monthly payment for a given period of time – five years, six years, and so on – and get a one time lump sum of cash.

Getting your cash for your annuity bring up one final important item: taxes. By selling your annuity, you get some good tax advantages – when it comes to passing your money on to your heirs. It works this way: if your estate is large enough to have to pay estate taxes, then a large portion (close to half) of your annuity could end up going to pay that tax. In addition, if your annuity has increased in value over the years, all of those gains will be taxed at your heirs’ rate of income tax, which – again – could be quite high. Now, on the other hand, by selling your annuity and buying mutual funds, bonds or stocks, you can bequest those items to your heirs, and they will not have to pay any taxes.

So, when you are considering the question: shall I sell my annuity, consider all of the options and all of the consequences, before making your decision.