What Types of Annuities are There and is it Possible to Sell Annuity Payments?

Understanding Annuities and Selling Payments

When it comes to financial matters, there are a lot of words that can be difficult to understand. DRB Capital can help people who are receiving annuity payments and would like to sell annuity payments in exchange for a lump sum of cash. To understand how it works when you sell annuity payments, it’s good to know what kinds of annuities there are.

Before You Sell Annuity Payments, What Are They?

Basically, an annuity is a contract that sets up periodic payments of a specific amount. Usually these contracts are done by insurance companies—but there are also annuities that are done by investment companies, like the yearly payments that lottery winners receive. From there it gets a little more complicated, but it’s still pretty easy to understand.

Sell Annuity Payments: The Two Different Kinds of Annuity

There are two basic kinds of annuity: immediate annuity and deferred annuity. An immediate annuity is usually a sort of insurance policy; in exchange for a certain amount of money, the insurance company makes a series of payments. The payments can either be the same amount throughout the life of the annuity, or they can grow over time. There are other factors that come into play, but that is basically the way that immediate annuities work.

Deferred Annuities Are a Way of Accumulating Savings to Eventually Take Them Back Out

These are usually retirement-type plans, like 401(k) plans or IRAs. With this type of annuity, people put money into an account, and that money is sometimes invested to “grow” it into a larger sum, or an interest rate is applied to grow it. The convenient thing about these types of annuities is that there are no taxes until the money is taken back out later.

In both cases, annuities are designed to make payments over a long period of time. While the payments are very stable, they don’t always give you the opportunity to use the money when you need it the most—whether to pay for education, to buy a new home, or to take care of big expenses. That is where companies like DRB Capital come in. DRB Capital can help you to transfer future annuity payments for a lump sum of cash to take care of major expenses; that way you’re really getting the money you need at the time you need it with this ability to actually sell annuity payments. If you or your independent advisor have any questions about how you can get a lump sum for your structured settlement, please call us at 877-894-4541.