There are a multitude of reasons as to why you might consider selling your annuity payments. Before we dive into some of the most common reasons, you first need to understand that this can’t be a decision made on a whim. It also can’t be made for frivolous purposes like going on a vacation or paying for your dream wedding.
The reason is because a judge must approve the transaction and the ruling is based on whether or not the sale would be in your best interest as the seller. Basically, the judge wants to make sure you fully understand what it means to sell your annuity, how much you’ll receive, and that you’ll still have a bright financial outlook that doesn’t involve squandering your annuity cash out.
That being said, here are some of the most common reasons people choose to cash in on those payments rather than receiving regular amounts over a set period of time.
Job Loss: Whether you’ve lost your job based on the inability to work due to an illness or accident related to your annuity or you’ve simply stumbled upon hard times, people often choose to get a full or partial lump sum to help tide them over until replacement income is found.
Investment Opportunities: You can also sell your annuity to take advantage of a new business opportunity, launch your own company, or even pay for your own home.
Pay Debt and/or Medical Bills: A lump sum can save you money over time if you’re paying on a lot of debt. This could include balances from credit cards, student loans, auto loans, and medical debt. Depending on how much you owe and how much you’re paying each month, cashing out your annuity to help reduce those balances could be extremely beneficial.
Education: Whether it’s for you or a family member, paying college tuition or other education expenses with your annuity payment can be extremely beneficial. Not only can you potentially save on interest from student loans, you can also set yourself up for better earning potential with a more advanced degree.
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