Fears, Fees, and Misconceptions: Overcoming the Challenges of Selling Annuities
Life happens, and when it does, it’s usually pretty expensive. Luckily, selling an annuity is a great way to get the money to pay for unexpected expenses or surprising opportunities. Yet many people never even consider this option, because they don’t fully understand it. If you’re unsure about selling an annuity, here are just a few things you should know.
People are afraid that they’ll get scammed. However, 48 states have Structured Settlement Protection Acts. Only New Hampshire, Wisconsin, and Washington D.C. don’t have such legislature. Those who break these laws get slapped with a 40% excise tax.
Unfortunately, selling an annuity does cost some money, but not as much as you might think. A surrender charge can claim anywhere from 4-12% of the owner’s money. These, however, only apply for a given timeframe, and they don’t apply if the consumer is selling rather than surrendering. The seller may also need to pay the advisor or sales rep about 10% of the invested amount, too.
One of the main reasons why people don’t sell annuities is because they think they’ll have to sell it all, when really there are actually three different ways to sell annuities: partial sales, entire sales, and lump sums. No matter what the situation, there’s an option that can meet your needs. There’s no need to be afraid of selling your annuity. If you need your money, go out and get it. No one will try to scam you, because no one wants to break the law. You also don’t have to sell your entire annuity if you don’t feel like it, either. There’s no reason not to sell your annuity if you need the money. If you have any questions, feel free to share in the comments.