What are the Processes for Selling My Annuity?
Selling a structured annuity should not be undertaken lightly. It is a lengthy process that involves a court approving the sale. The entire process takes upwards of several months. The process differs widely depending on the state you live in. Most structured settlement companies will aid you in the process.
If you’re considering selling a structured settlement annuity, you’ll want to follow these important steps:
- First, shop around to find the best quote. Structured settlement companies apply what’s called a discount rate to the future payments you receive, so the lump sum payment is smaller than the total amount of your settlement.
- Second, you’ll need to provide documents to the company you are selling the structured settlement to. This includes the documentation from the insurance company responsible for the annuity, the settlement and release agreement from a lawsuit, and the application for selling the settlement. If you’re divorced or have declared bankruptcy since receiving your annuity, you may need to provide additional documentation.
- Third, depending on the state you live in, you may be required to consult an attorney or a financial advisor before selling your structured annuity. You can find a list of the state-by-state requirements here.
- Fourth, a judge will need to approve the sale of your structured settlement. Further, the judge will take steps to determine whether you understand the terms of the sale. You’ll also need to demonstrate that you have a convincing need to sell your annuity. Most structured settlement sales are approved, but reasons for denial include a failure to demonstrate adequate financial need, improper documentation or a poor discount rate from the company.
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