Can Your Annuity Be Bought?

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One of the greatest features about an annuity is its flexibility.  While the funds that you contribute to an annuity today can simmer and be paid out to you via a fixed monthly payment on a future date, the ability to talk to a company to buy annuity in exchange for a lump sum brings another element to the table that other investment strategies may not offer.

Indeed, if you have an annuity, you may be allured by the draw of selling off your annuity in order to receive a lump sum payment in return.  Obviously, the allure is spurred on by the ways that the lump sum can be spent, such as:

All are worthy enough reasons for you to find a company to buy annuity.  However, before you begin the journey of exploring company websites and calling for quotes, there is one important question that you need to ask yourself:  Can the annuity that is under your name be bought?

Non-Transferable Annuity

There are certain annuities that can be bought that have non-transferable clauses attached to them.  If an annuity does fall under this non-transferable umbrella, then you simply cannot sell your annuity to a secondary buyer and must live with the structured parameters as dictated within the annuity’s contract.  You should be able to determine whether your annuity is transferable or non-transferable by examining your contract; if you cannot find any language on the contract that states what kind of annuity you have, you may want to consult a financial advisor or an attorney just to ensure that you are not missing anything.  Remember, it is better to have you nip something in the bud than to be in the process of selling your annuity only to find out you can’t, if only to save face.

A Semi-Loophole

If you do find out that you have a non-transferable annuity, but you really need to use that money now instead of later, you still have one option available.  You can use the non-transferable annuity as asset or a form of income and apply for a regular bank loan.  Of course, this process does come with various pros and cons.  The good news is you would have the money that you need, but the bad news is that you would then have to deal with paying the bank their loan back plus interest.  While this strategy may work if you are planning on investing or buying a home, it may not be the best option if you are looking to use the money to pay off debt.

Don’t Be Afraid to Ask

If you are thinking about getting involved with annuity, you may want to make sure you inquire about whether or not the annuity is transferable or non-transferable.  Doing so from the outset may save you a lot of grief and dashed hopes in the future, and it can also help you shape your financial future even better.

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