Structured Settlement Investments
How Do You Buy an Annuity?
Consumers can buy an annuity from insurance companies or other annuity providers. Annuities can be purchased by paying a lump sum of money or by paying regular sums (of smaller amounts) over a period of time. In the case of an immediate lump sum payment, the consumer (or annuitant) begins to receive annuities immediately. Annuities are great investment vehicles for people who have contributed the maximum allowed to tax-deferred retirement plans such as 401(k), 403(b), or IRA. When annuities are purchased over a period of time, the period during which the consumer makes payments is known as the accumulation phase. The “annuitization” phase begins when the consumer begins to receive annuity payments.
What Kinds of Annuities Are There?
What Do Annuities Have to Do With Death Benefits?
You Can Cash Out Your Annuity?
What Kinds of Annuities Are There?
Annuities can run over a lifetime or be paid out over a specified time period. In the case of a lifetime annuity, you receive annuity payments for the reminder of your life. However, you could receive much less than you paid to the provider should you pass away sooner than expected. Lifetime annuity payments are provided only during the annuitant's lifetime. Thus, if you pass away soon after you begin receiving payments, your money remains with the annuity provider.
Term certain annuities, however, continue for a specific period of time — sometimes 10 or 15 years — even if the annuitant passes away. If this occurs, his or her beneficiary would continue to receive the annuity payments.
What Do Annuities Have to Do With Death Benefits?
If you buy an annuity, and you pass away before the annuity payments start, your beneficiary receives a death benefit. The death benefit might be paid in the full annuity amount or in the amount contributed by the annuitant, whichever is greater. Even if your annuity investments are performing poorly, you do not lose the amount you paid in. Once annuity payments start, however, death benefits cease.
You Can Cash Out Your Annuity
It is possible that your situation could change and you would be better off with an immediate lump sum payment. The terms of a deferred annuity payment could become quite unsuitable if, for example, you were to fall ill and require expensive treatment.
It could also be the case that investments offering better terms, or meet your needs more appropriately, could appear in the market. In such situations, you might want to sell your existing annuity payments and buy a new investment.
You could surrender your existing annuity. However, surrender values are typically very low compared to your investment.
It could be better to sell your annuity through a structured settlement broker like Structured Settlement Investments. You would then receive immediate lump sum cash. Our reputable industry experts would advise you about the best options, and also offer you a number of plans. For example, you could buy an annuity with higher payouts instead of opting for a lump sum of cash.
Contact Structured Settlement Investments
If you would like to learn more about selling your future annuity payments for a lump sum of cash, contact Structured Settlement Investments today.