Annuity Payments

Written by Michael Federico
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Annuity payments are most commonly thought of in terms of retirement investments or insurance settlements. However, an annuity can be any investment that pays out on a regular schedule over a fixed period of time. Structural settlements such as these can be used to pay heirs and beneficiaries their inheritance. Lottery winners and recipients of personal injury settlements can also receive periodic payments.

Most annuity payments enjoy tax deferral on growth. This lets a person receive more of the actual amount of money that is coming to him. Insurance companies cannot change annuity payments or the tax deferrals in any way.

Is it Possible to Sell Annuity Payments?

The fact that insurance companies cannot do anything to payments has led many to the conclusion that they cannot do anything either. However, a person has options that allow him to get the most out of his payments. If monthly or annual annuity payments are not doing enough to help a person feel financially secure, or they are not enough to help him buy a home or send his child to college, he can sell his annuity payments.

Rates on sales of annuities vary. It is safe to say that when a person sells future income he is ultimately giving up some money. However, many companies that buy annuity payments give sellers very good rates. Also, a seller does not have to unload all of his annuity payments. He can sell enough to secure the money he needs and continue to receive payments down the line.

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