Cashing in on Annuities

Winning the lottery, receiving a large cash gift, winning a major settlement in a law suit – all of these things seem like they are the key to instant wealth and happiness, but the money tends to get locked away for quite a long time. In many cases, large awards have a tendency to be paid out as annuities, a process by which a large sum of money is parceled out over a lengthy amount of time. An annuity can be good for those looking to create an income, but quite a difficult proposition for those that need immediate funding. Fortunately, there are many companies that buy out annuities.

Annuity buyout companies are organizations that will grant a lump sum in exchange for becoming the recipient of one’s annuity. While the companies do tend to pay less (and often, substantially less) than the total amount one would receive over the course of the annuity’s payout, one must realize that the entire payout process is somewhat of a gamble. Lifetime annuities, for example, grant rather small payments over the course of decades. This may not be terribly beneficial for many, and as inflation continues the total worth will seem significantly lower. By allowing a company to purchase an annuity, the recipient can actually benefit from a sizable portion of their reward during a time frame that they will actually be able to use it.

There are many situations in which an annuity is preferable to a lump sum reward, but it is a fact of life that people often need their reward money quickly. Be it because of a mortgage, medical bills, or just because one would like to enjoy their reward, having a company buy out an annuity can be a very helpful process. If one wishes to reap the rewards of a large payment without having to wait, arranging for a buyout may be the best option.