- Written By Catherine J. Byerly
Catherine J. Byerly
Catherine J. Byerly has worked in digital communications for the past four years, handling everything from award-winning, on-air public radio casts to writing in-depth investigative stories for business news sites.Read More
- Edited ByEmily Miller
Managing editor Emily Miller is an award-winning journalist with more than 10 years of experience as a researcher, writer and editor. Throughout her professional career, Emily has covered education, government, health care, crime and breaking news for media organizations in Florida, Washington, D.C. and Texas. She joined the Annuity.org team in 2016.Read More
- Financially Reviewed ByMichael J. Boyle, M.S.
Michael J. Boyle, M.S.
Former Compliance Professional
Michael J. Boyle began his career in the securities business in 2011 as a registered financial professional. Over his tenure, he’s worked with asset classes including equities, fixed income, CDs, mutual funds, futures, options and foreign currency.Read More
- Updated: June 11, 2022
- 7 min read time
Selling Your Annuity PaymentsCan I Sell My Annuity?Yes, you can sell your annuity payments for cash. In the event your financial needs change and an annuity is no longer meeting your needs, you can sell your current or future payments for a lump sum of cash. Annuities can be sold in portions or in an entirety. If sold all at once, you forfeit receiving all future periodic payments. However if you sell a portion of your payments, you will receive a lump sum of cash up front, and at a later time will be able to resume receiving periodic payments.Are There Alternatives to Selling My Annuity?It is best to discuss your options with a trusted, licensed financial advisor who is familiar with the annuity in question. Other savings, such as a 401(k) plan, whole life insurance policy or a personal loan may be less expensive. If the annuity is in the accumulation phase, the firm may allow small, penalty-free withdrawals. Experts also advise speaking to a tax consultant before making any decisions because the sale will have tax implications.Do I Have to Sell All of My Annuity or Can I Sell Just a Portion?Selling your annuity contract in its entirety provides you with a large one-time lump sum. However, if you need immediate access to cash for a down payment on a house or for unexpected debt, you can choose to sell a portion of your payments. A partial annuity sale allows you to sell a portion of your payments by dollar amount or by time period. For example, you may sell years three through five of a 20-year annuity. During those years, you will not receive your regularly scheduled payments. At the beginning of year six, periodic payments will resume.What Are the Benefits of Selling My Annuity?Selling your annuity provides you with an influx of cash that can help to build a better quality of life for you and your family. A lump sum of cash offers you the freedom to alleviate debt, address emergencies, and even travel. For more information on ways to maximize on your savings, visit our Investing in Yourself page.Is It Legal to Sell My Annuity Payments?As long as your annuity contract is not the result of a lawsuit settlement, it is perfectly legal for you to sell your annuity without the approval of a judge. Sales of structured settlements, on the other hand, require court approval. The judge's role in these transactions is to ensure that selling your settlement payments is in your best interest and will not put you or your family in financial jeopardy. Once the sale has been approved by the court, you and the buyer may move forward with the transaction.
About the Selling ProcessHow Does Selling My Annuity Work?Before proceeding with the decision to sell your annuity payments, it is highly recommended that you consult with a financial advisor to evaluate whether this transaction is in your financial best interest.
Selling your annuity involves a number of steps:
• Research annuity buyers for best service.
• Receive a quote.
• Consult with your financial planner.
• Complete and submit required paperwork.
• Receive your money.
For an in-depth view of the annuity selling process, visit our page on how to cash in on your annuity.How Long Does It Take to Receive a Quote?Typically, receiving a quote — free of charge — takes only a few minutes but can be completed within a day for more complex sales. Beginning the selling process is simple, and receiving a quote is the first step. Be sure to shop around to a few different annuity buyers for the best quote.I’ve Sold My Annuity Payments. What Now?Selling your annuity provides you with a lump sum of cash. That leaves you free to put a down payment on a house, alleviate larger debt or pay college tuition. It is also important to remember that selling your entire annuity does not mean you will receive the full value of the contract. Annuity buyers will purchase your annuity contract at a discounted rate that typically ranges between 9% and 18%. Be sure to discuss all your financial options with a lawyer or financial advisor prior to proceeding with the sale.How Soon Is Money Disbursed After Selling My Annuity?The process for selling an annuity generally takes about four weeks. This accounts for the time needed to process the paperwork from the insurance company, which must be completed before your payment is disbursed. If you need immediate cash but are still waiting for your annuity sale payout, some annuity buyers may offer immediate cash advances that can help with outlying expenses.Interested in selling some or all of your payments?Turn your future payments into cash you can use right now. Get started with a free estimate and see what your payments are worth today!
Types of PaymentsWhat Information Do I Need to Sell My Structured Settlement or Annuity?You’ll need a copy of your original annuity contract or structured settlement contract from the insurance company that issues your payments. You’ll also need one to two forms of identification with your picture on it. These can include a driver’s license, state ID, birth certificate, Social Security card or passport. Finally, you’ll need your settlement and release agreement. This is the document that you should have received when you accepted your structured settlement. It outlines the terms of your agreement and proves that your case was settled.Can I Sell My Government Annuity?A government annuity can mean many things. Social Security and disability are technically government annuities because they are fixed, regular payments. However, Social Security and disability checks cannot be sold. A government annuity may also refer to a pension you receive after retiring from a local, state or federal government position. It might be illegal for you to sell your pension. Many federal pensions can't be sold, and state laws limit the sale of other government pensions. Check to see if selling a government pension is legal in your state.What If I Received an Annuity Through an Inheritance?While an annuity may have been a profitable financial option for someone else, regular annuity payments may not be the best decision for you. Inheriting an annuity also requires you to inherit the tax implications. It is possible to sell an inherited annuity in exchange for a lump sum of cash.What Type of Payments Can't Be Sold to an Annuity Buyer?Not every type of annuity can be sold. Some examples of annuities that can’t be sold are payments from a divorce settlement, child support, 401(k) distributions and veteran’s benefits. Social Security and disability payments are also ineligible for sale. In addition, many factoring companies will not purchase workers compensation payments, pensions, variable indexed annuities or company buyouts.
Taxes & FeesAre There Taxes Involved When Selling an Annuity?Selling your annuity payment does have tax implications. Any lump-sum payment you receive from an annuity purchaser will be treated as income, and you will owe taxes on the money in the year you receive it.What Fees Are Associated with Selling an Annuity?The primary fee associated with selling an annuity is the discount rate provided by the annuity buyer. In exchange for upfront cash, buyers charge a fee in order to profit from the transaction. The discount rate is determined largely by predicted future interest rates, in addition to other factors. The lower the rate, the more you as the seller will profit from your lump sum payout. The higher the rate, the more you will stray away from your initial contract value. Be sure to consult with your financial advisor prior to making this transaction, and consider shopping around for buyers that will provide with the best bang for your buck.If I Sell My Annuity, Will I Still Have To Pay Premiums?Should you decide to sell your entire annuity contract, you are no longer responsible for paying monthly premiums. All responsibilities will be assumed by the new annuitant. However, if you decide to sell a portion of your annuity, you are still responsible for making payments on the contract.
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