An annuity is a financial instrument that provides a stream of regular monthly income after an initial investment of money has been made previously. Annuities are very sophisticated tools used in financial planning and risk mitigation. Annuities are considered safe investments with stable but low expected returns, compared to other investment instruments. However, they are useful for risk diversification as well as short term investments when the market sentiment is too turbulent.

There are 4 types of annuities known as immediate versus deferred and fixed versus variable. You can have a fixed immediate annuity but there is no such thing as a fixed variable annuity (get the idea?). The main purpose for fixed deferred annuities in personal financial planning is to put aside a sum of money for several years to accumulate interest and provide a constant stream of income upon reaching retirement age. Variable rate annuity payments are tied to the performance of the market and may be too risky for those that require stable income. An immediate annuity provides an instant payment stream although it can be expected to be very low since there is no sufficient time for interest compounding to work its magic.

You can find people selling their annuity payments for a one time lump sum of money. This is typically done to finance some other large purchases such as down payments for a new home or to pay off sudden hospitalization bills. The trade off when you sell annuity payments is that the sum you received will be lower than what you can potentially get from the total monthly stream of annuity income.

Sometimes, the annuity seller does so because they did not buy the annuity plan themselves and actually received it as a gift or inheritance. They may prefer to use the money for opportunistic profits and put it to better use, especially when the owner of the annuity is still young and can afford to have an aggressive investment risk profile.

The best way to sell annuity is through a reliable broker but you most likely need to pay a commission fee to them. These are usually large companies that frequently buy annuity leads to build up a large databse of annuity buyers and sellers for a fast trade. You can always choose to sell annuity payments online through specialized trading websites with zero service fee, although you need to be careful of fraudulent dealers trying to scam your money. It is better for you to get familiar with the laws on annuity sales such that you know how to seek grievances in case you pay victim to an annuity buying scam.

As mentioned, selling annuity payments is a sophisticated process and you can even choose to sell part of the regular annuity income from a particular time frame instead of the entire plan. For example, if you own a fixed annuity of 20 years, you can sell only the payments from the first ten years, leaving you with the remaining payment for other purposes.

Instead of selling your annuity plan to others, you can even use it as collateral for secured personal loans instead. There are even more creative ways to sell annuity such as converting to a larger payout over a shorter time window. Such swapping usually belongs to the realm of risk management and is usually used by large trading companies.

Online annuity calculators are helpful tools to determine the true value of the annuity you intend to sell or buy. You can have access to them for free on the websites of insurance companies as well as financial brokerages. That will give you a starting figure on how much to quote for selling annuity payments from your portfolio.

As the global economic landscape changes, it is important to rethink your personal financial goals and wealth building plans. The investment decisions you have made years ago may have become invalid and the large amount of money tied up in your fixed annuity may be holding back your potential profits. Learning how to sell annuity allows you to channel those moneys to better performing investments in spite of the current economic status.

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