Why exactly are so many people starting to sell their annuity settlements? There are quite a few reasons why annuities can be problematic for those who own them, and because there are so many different types of annuities, it’s often hard to be sure that you’ve chosen the best option before you’re locked into it already.
Selling your annuity payments can be a great way to avoid paying huge fees while still being able to control what happens with your money. Here are just a few of the most common reasons why people choose to sell annuity payments to pre settlement loan companies:
- You’re locked into a contract — for years. One of the most frustrating things about annuities is that you have to agree to the insurer’s contract, which usually involves an annuity being paid out over a long period of time. If you have an annuity because of a lawsuit settlement, you might not even have had full control over what the details of the arrangement included.
- Maintenance fees and early withdrawal fees. You’ll typically end up paying a small percentage of your annuity to the insurer for annual maintenance fees. If you’ve purchased an flexible annuity which involves payments that depend on market values, then you’ll also have to pay around 2-3% in investment management fees each year, too.
- You can’t take out your money early, even in an emergency — and if you do, you’ll pay a lot of money for early withdrawal fines. Whether you have a medical emergency or you’ve just found a better way to invest your money, the frustrating thing about annuities is that you don’t actually have any control over your money until smaller payments are sent out to you. This can be a big problem when you’re facing a huge investment or purchase and you need to be able to use a large portion of your settlement amount.
So why exactly is selling your annuity the best choice for you?