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Should You Sell An Annuity?

If you have a structured settlement or annuity payments owed to you, then you might consider how nice it would be to get all your money in one lump sum. Depending on how much you are owed, having that money all at once could make a big difference in your quality of living and other decisions such as buying a new car, paying medical expenses, etc.

But selling your annuity is not always the smartest financial decision you can make. There are tax penalties you may face for doing this and it can leave you in trouble later if you are not responsible with the money. Not only that but you may not even be allowed to sell your annuity if it was from a court-ordered structured settlement.

It some states and some cases it may not even be possible or legal for you to sell your annuity so this is the first thing you need to consider. About 2/3 of the states in America have laws against the selling of structured settlements and there are some federal restrictions on third party transfers of structured settlements so you need to look into this first and foremost. You may need to talk to your attorney to check the policy on your original structured settlement agreement.

Next, you want to consider why you want to sell in the first place? Are you just impatient to get your money? Do you want to go on a shopping spree? These are not good reasons to try to sell your annuity payments. You also should not sell if you are under the age of 18 or if the annuity is your only source of income. If you have an immediate financial emergency then it might be considered a good reason to sell.

You might need to go back to court to get a judge to approve you selling your annuity payments for a structured settlement. You also need to be sure if you do sell, it is to a well established and reputable company. You can learn more about the companies that are providing this service on the web. In many cases, you will want to take some time to look at both the pros and the cons of making this decision. There is a substantial loss if you go with it, but gains as well. Only you can determine if it is the right thing to do to sell your annuity.