A Look at the Market for Selling Annuity Payments
Annuities are great purchases; they ensure that the insurance company
from where you purchased them will support the later stages of your
life with periodic cash influxes (which you already paid for when you
were younger). Annuities are great for those who want greater financial
security far into the future.
However,
there are times when a person with an annuity program needs cash as
soon as possible. One of the most viable options for such a person is to
sell his annuity payments in order to get cash immediately. A Market Watch article details the potential of selling off annuity to a second market:
The secondary market annuity category is somewhat of a finite asset
class with only 600 million to over a billion dollars of inventory
typically available each year. More and more investors are learning
about and participating in this niche sector, which is actually starting
to affect yields and raise prices due to increasing demand.
Most secondary market annuities can provide a higher yield (usually
0.50% to 2.00%, or more) and a larger contractual payout than what's
available from a new issue standpoint — and the buyer can choose the
terms and carrier ratings to match their specific objectives.
The growth of the market can only mean good things towards annuity
holders who want to sell off part (or the entirety) of their annuities
for immediate cash. As demand for second market annuities develop, the
number and pricing of the annuities sold on the market is bound to
increase, creating a more competitive and healthy annuity market.
People who will want to cash in on this trend, however, need to learn
about the nature and worth of their annuity, as these factors will play
a vital role in determining the pricing of the annuity, or if the
policy is transferrable at all. It is also important for the buyer of
the annuity policy to be hand-picked from the crop out there. Buyers
have different agendas and different modes of payment, so it pays to
pick the right buyer.