Selling fixed annuities can be a hassle, but before you begin to think about selling, you need to fully understand what an annuity is. Annuities are an insurance product that pay income at a fixed rate, and are a popular choice for investors who want to receive a steady income stream in retirement.
The income you receive from an annuity can be doled out monthly, quarterly, annually or even in a lump sum payment. While annuities can be useful retirement planning tools, they can also be a poor investment choice for certain people because of their high expenses. For this reason, many people try to sell their annuities. If you’ve decided to sell your annuity, here are two ways to go about it.
Insurance Agents
Annuity holders who are looking to sell should be aware that due to transaction costs, they’re going to take some form of loss when selling. However, in cases where interest rates have declined from the purchase date, there’s a possibility that they can turn a profit. The best way to find buyers by far is through the insurance agent who sold the product. These agents have a good sense of the market and are able find the best compromise for buyers and sellers.
Annuity Brokerages
Another popular option for selling your annuity is to go through a specialized annuity brokerage that connects buyers and sellers. However, this method often comes with higher transaction rates. In the past few years, transparency has gradually increased, which has prompted agencies to recommend that customers shop around to find the best situation for their particular needs.
Strategies
Both insurance agents and annuity brokerages offer a wide variety of options depending on the circumstances and desires put forth by someone who wishes to sell an annuity. These options include a straight purchase, partial purchase, reverse purchase, and split purchase. A straight purchase is the most common way of selling an annuity, while a partial purchase is a lump sum for some portion of the income stream. Reverse purchases are more complex, which makes them the least popular strategy for selling.
Selling fixed annuities can be tough, but with the right information and insurance agent assisting you, there should be no problem.
