Annuity 101

Written by Josh Dodes
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While savvy investors usually require no such tutelage, plaintiffs who have won annuity payments as part of a structured settlement often require a lesson in Annuity 101. Unfortunately, all too often, individuals who collect such annuity payments have little understanding of what makes annuities so powerful. Ironically, those investors with a sophisticated understanding of and an interest in annuities' long-term worth are often unable to find annuities from A-rate insurance companies at great prices.

Fundamentally, annuities are long-term investments that provide two key benefits. First, and most important, annuities are tax-deferred investments, which means that all of your principal and interest are going to making more money--not to the IRS. And second, annuities are tied to long-term market success, an exceptionally reliable investment made even more so by the fact that most annuities are managed by top money managers.

Annuity 101 for Those Looking to Sell Annuities

Of course, if such long-term benefits do not adequately address your shorter-term needs, you will be happy to know that any good Annuity 101 course will include a lesson about selling annuities that you do not want. Thanks to a handful of experienced, reputable annuity buyers, individuals who would prefer a lump sum in place of a court-mandated gradual payment can now sell future payments for short-term cash. Such an option has become increasingly popular, both because the government has recently regulated the process and because smart investors are waiting on the other side to buy these long-term annuities from companies purchasing such payments from plaintiffs.

Whether you are looking to enjoy the long-term benefits of annuities or to sell them, your options are more diverse than ever before. If you know where to look, you can now buy or sell annuities in a newly legitimized way. Even a true Annuity 101 beginner will understand that that is a win-win situation.


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