There are a number of different annuity investment products out there that are designed to provide owners with a stream of income now or into the future. Many people, for example, purchase annuities to ensure they have monthly income after they retire. The good thing about annuities is that you can work with an insurance company to develop the best annuity to meet your individual needs. For example, you can choose a fixed or variable annuity, determine the terms for how long and how much you are going to be paid, designate a beneficiary if you pass away before the annuity terms are complete, etc. In addition to annuities you purchase as an investment, you may also be awarded an annuity for casino winnings, lottery jackpot, or a pension.
While annuities can provide owners with a steady stream of income, it's important to know that there are times when it might not be the best idea to hold on to all of your annuity payments. In the event that you in need of money now to pay for a dire situation or take advantage of a new opportunity, it instead may be a good idea to sell all or some of your annuity payments. You have an annuity to protect your future, but if you need the money now to stabilize your present or enhance your future, it might make more sense instead to sell. So let's talk about some of the times it might be good to sell your annuity for a lump sum of cash.
You're Going Back to School or Are Paying for School for Someone Else
College is usually a good investment, but it can cost a fortune. If you don't want to be stuck with student loans for the next 10-15 years, consider selling your annuity for a lump of cash instead.
You Need to Pay Medical Bills
Medical bills are the number one reason why people go bankrupt in the United States. This is another scenario where it might be a good idea to sell your annuity payments as you don't want debt collectors to try tracking you down.
You Want to Put a Down Payment on a Home
Many people find it very difficult to save the 20% needed for a down payment on a home. Many experts consider this to be the minimal amount you should put down to ensure you aren't paying for depreciation and the bank will take your mortgage application seriously.
You Have a New Investment Available
Whether you own a business and want to expand or you see a new real estate investment you think is worthwhile, selling your annuity payments could go a long way to helping you secure a new investment for your future. If you believe you can make more money with a different investment, the lump sum vs. annuity debate ends up being very easy to score.
