What is An Annuity?
- There are many kinds of annuities for different situations
- Annuities are sometimes used for the payment of structured settlements
- Annuities are meant to provide income over time, rather than all at once
An annuity is a contract where an insurance company or another group agrees to make payments to an individual for a specific period of time. Many times, the person receiving the payments is the plaintiff-or the injured party-in a lawsuit. The choice to settle a case using an annuity saves the defendant much more money than a cash settlement, because of a concept called time value of money.
Annuities are designed to provide income over a long period of time-generally several years. There are multiple kinds of annuities; many lottery winners receive an annuity for their jackpot winnings, for example. Just because the annuity guarantees payment over a period of time does not mean it is always a good choice for the plaintiff in a lawsuit however; there are many circumstances that lead to the need for the person receiving an annuity to collect all or some of the money all at once, rather than waiting for payments over several years.
Why Do People Sell Annuity Payments?
- Many people who are involved in lawsuits have bills to pay
- Some people receiving an annuity want to invest in their education, or buy a house or car
- Selling an annuity can be a good decision if you need a large sum of money for a major expense
If you have been injured because of someone’s negligence, and have received a settlement in the form of an annuity, then you may also have a lot of expensive needs that go along with your injuries. Since lawsuits and settlements can take months or years to be concluded, those bills may pile up. If you have these kinds of expenses, then selling an annuity for a lump sum of cash may be a good option for you; you can take care of bills and get your life back to normal.
Some other reasons you might want to sell your future annuity payments for cash you can use right now include wanting to pay for your education-or for education for your children or loved ones. You may want to buy a house with your annuity money. Other major expenses include cars and starting a new business. In all of these cases, it probably makes sense to try and sell annuity payments in exchange for a lump sum of cash.
What Kind of Annuities Qualify?
- Although not all annuities qualify, many do
- Structured settlement annuities are the primary type
- We can help you find out if you can sell your annuity payments