Useful Facts About Annuity Selling
The first things to be informed about are the terminologies involved in the process. ANNUITY as Wikipedia describes it is a financial product which is sold by financial institutions to offer savings or financial planning. ANNULTANT is a person or persons who are receiving their income from annuity contract. ANNUITY CONTRACT or POLICY is an agreement which states terms and conditions of annuity and issues by an insurance company.
ANNUITY ISSUERS are the companies who issues annuity. The conversion of deferred annuity contract to the income payment stream is called ANNUITIZATION. There are still numerous terms that can flood you when your into selling annuity but the ones mentioned are the basic ones.
So how will the annuity selling prosper? You will need to price your annuities first. This can be done by discounting future payments by the discount rate. Discounts vary depending on the buyers but usually it’s between 7 to 17 percent.
Next thing to focus on are the buyers. There are many possible buyers for your annuity but are they reputable enough? You should cautiously choose the right one for you. An important consideration is whether you’re dealing with your broker or principal.
You can have better pricing through brokers since they can find multiple buyers for you. You may not be obliged to pay their brokers’ fee since buyers will be the ones doing it. Dealing with the principal on the other hand can also be a good option since there is an absence of brokers’ fee. Normally, the principal uses brokers to get them into business.
If you already have potential buyers, you will have to deal with the selling process. The first thing to do is to identify present and future financial condition and cash needs. Keep in mind that you can sell a portion or all of your cash payments in the future. You can consult a lawyer or financial advisor to assist you in the process.
Next step in selling annuity is to contact a financial advisor or an insurance company who can sell or issue your annuity. This step is vital to identify if you can surrender (cash out) your annuity and to determine the penalties included. Basing on the annuity type and contract, it will be possible to cash out the policy and pay the charges directly to its insurance company. This process can give you more cash than selling your annuity on your own. There are also immediate annuities which can be cashed out in an earlier period of time.
Your next step in the selling process is finding potential buyers for your annuity. Buyers can be found on websites. It can also be acquired through your friends and relatives. In selling, you must get numerous quotes for your annuity since the potential buyers will be asking these from you.
The above information are just basic when it comes to annuity selling. You can learn a lot more from books and other websites. You must not only trust your financial advisors or lawyers to sell your annuity for you. You must always keep in mind that proper information about the process can be the most powerful tool to gain more money.
Being wise on selling your annuity can bring you huge cash. So keep on learning and earning!
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