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J.G. Wentworth Blog

What is an annuity, and why would someone sell theirs?

In a recent blog, we reviewed some important structured settlement concepts for anyone considering selling their future settlement payments for cash. Today, we would like to perform the same task with annuities, and respond to some common issues and concerns expressed by annuity holders in their discussions with our J.G. Wentworth representatives.

Annuities: Fundamental to the lives of almost 100 million Americans

Today, there are as many as 100 million Americans who either receive, or are scheduled to receive, money from an annuity. An annuity is a fixed sum of money paid to someone at regular intervals, typically for the rest of their life. The person who is receiving an annuity has either purchased it on their own or received it as a job benefit, for instance in the form of a pension.

While there are some exceptions, the majority of annuity holders are targeting their annuities for their retirement, and with good reason: the benefits of receiving these monthly payments, and the financial security they provide for retirees, is substantial. That said, there are reasons why an annuity recipient may choose instead to sell their annuity payments sooner for a lump sum of cash.

Selling annuities: The motivation

Generally speaking, there are three main reasons why annuity holders decide to sell their payments.

Reason 1: They cannot afford to wait for these annuity payments to get to them at a later date.

The first reason many annuity holders call J.G. Wentworth to sell their future payments is a simple one: they need that money sooner. Perhaps they need cash to pay off a mortgage, or pay off debts resulting from a sudden medical emergency. There may also just want to help loved ones climb out from under their debt obligations, which can include credit card debt or tuition costs for a higher education.

Reason 2: The annuity holder has inherited a policy they do not want.

The second category of folks who call J.G. Wentworth are those who have inherited an annuity policy they do not want. Frequently these are the descendants of annuity recipients who unfortunately passed away before their annuity payment period had concluded. But these new annuity recipients are frankly not interested in the annuity terms, and would much rather receive cash payments now instead of waiting for that money to be paid out to them.

Reason 3: The annuity holder now faces unanticipated tax related issues following their retirement.

This third category of annuity holder may want to change their life insurance plans or estate planning strategy. Alternatively, they may find themselves bored by their retirement and interested in new employment, another factor that may change their post-retirement financial interests.

Selling annuity payments: The bottom line

Regardless of the specific reason, the bottom line is that annuity holders in any one of these three categories have decided that the benefits of waiting for that money to get to them at a later date are outweighed by their immediate needs. This logic makes sense, after all; why wait for money to be paid to you years, even decades, in the future, when you need it today?

J.G. Wentworth: The nationwide leader in purchasing future payments

And here is our bottom line: if for any reason you are an annuity recipient looking to get cash now out of your future payments, our company, J.G. Wentworth, can help. We have handled over $4 billion in future payment transactions, have been in business for over two decades, and have a Better Business Bureau rating of A+. We have the experience, know-how, and high level of customer service that no other annuity purchasing company can match.

For further discussions about your specific financial situation, or to receive a free, no-obligation quote on the value of your own future annuity payments, we urge you to call us anytime at 877-227-4713.