Finances in general can be a tricky business, and for many people, they’re not the easiest to understand or keep up with. Annuities and settlements can be difficult to understand, but with more than 34.8 million deferred annuity contracts totaling $2.58 trillion, it’s time to learn! Read on for a few basics on the financial terms.
What is an annuity?
An annuity is a sum of money paid out to someone yearly. It is usually a set amount over a set period of time. The most popular are paid out until death or over the course of 25 years. There are also “immediate” annuities, where the recipient begins receiving money in as little as 30 days. There are numerous options for how you can make an annuity work for you, and a financial advisor can help you pick what’s right for you.
Can I sell my structured settlement for cash?
Average payouts for structured settlements are around $324,000 which makes them quite sought after. You may be able to sell these settlements, but in this case, you will want to talk to an advisor or at least a friend who knows finance about your decision first.
How does selling fixed annuities work?
Fixed annuities are actually quite sought after because they are incredibly low-risk, and tend to stay around the same payout every year. Their consistency makes them attractive to many buyers. Selling them is quite easy, and can be done in a number of ways. As with any decision regarding annuities and settlements, it is best to meet with a financial advisor to ensure that laws and regulations are followed.
Deciding between lump sum and annuity — which is better?
This is a simple answer: it depends on your situation. If you need a large amount of cash quickly, for a big purchase or medical expenses for example, then a lump sum is the way to go. But if you want something more consistent that you can count on over a longer period of time, then go with an annuity!
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