Ready to Sell Your Annuity Payments?

1. Sell in entirety. You receive a single lump sum for all remaining payments and give up future periodic income. This is the most straightforward option.
2. Partial sale. You sell a defined portion of your payments — for example, years one through five — and receive a lump sum for that portion. Once those years pass, your remaining payments resume as normal. You can also do additional partial sales down the road if needed.
3. Custom lump sum. Rather than selling by time period, you choose a specific dollar amount you need upfront. That amount is deducted from your future payments, giving you more control over how much you sell.

What Annuity Payments Cannot Be Sold?

Not every payment stream is eligible. The following generally cannot be sold:

• Social Security and disability payments.
• Divorce settlements and child support.
• VA and veteran’s benefits.
• 401(k) distributions.
• Worker’s compensation (in most cases).
• Government pensions (varies by state).

If you’re unsure whether your annuity qualifies, contact us and we’ll let you know quickly.

Why do people sell their annuity payments?

Most people sell because their financial situation has changed and they need money now — not on a payment schedule set years ago. Common reasons include:

• Paying off high-interest debt.
• Covering medical bills or unexpected expenses.
• Making a down payment on a home.
• Funding college tuition.
• Starting or investing in a business.

Selling gives you control over money that is already yours. That said, it isn’t the right move for everyone — we encourage you to speak with a financial professional before making a decision.

Do I have to pay fees when selling my payments?

No hidden fees — ever. The price we quote you is the price you receive at closing, inclusive of all costs, legal fees, and our profit. No surprises. An informed seller is a protected seller.

How we calculate your annuity offer

Your offer depends on the total size of your annuity, your payment schedule, the number of payments remaining, and the discount rate. The discount rate is the buyer’s fee for providing you cash today instead of over time — a lower rate means more money in your pocket.

We provide a full breakdown of how your offer is calculated so you understand exactly what you’re getting and why. If you receive a better offer elsewhere, bring it to us — we’ll do our best to match or beat it.

How long does it take to sell annuity payments? 

Investment annuity sales typically close in about two weeks. Structured settlement sales can take up to eight weeks because most jurisdictions require court approval — a judge must verify the sale is in your best interest and won’t leave you or your family in financial jeopardy. This is a legal protection designed to look out for you, and our team will guide you through every step of that process.

If you need cash before the sale closes, we can offer a no-interest, no-fee cash advance once you’ve agreed to sell. The advance is deducted from your final lump sum.

The tax treatment of an annuity sale depends on the type of annuity you have and your individual circumstances. Here is a general overview — but please consult a tax professional for advice specific to your situation.

Investment annuities. When you sell an investment annuity, the portion of your lump sum that represents earnings — meaning anything above what you originally contributed — is generally treated as ordinary income and subject to federal and state income tax. If you are under 59½, you may also face a 10% early withdrawal penalty from the IRS.

Structured settlements. Structured settlements that were established to compensate for a physical injury or illness are generally tax-free under federal law. However, if your structured settlement includes punitive damages or compensation for non-physical claims, those amounts may be taxable. The tax treatment of a structured settlement sale can be complex, and the rules vary by situation.

What this means for you. Before selling, it’s worth understanding your potential tax liability so there are no surprises when you file. A CPA or tax attorney experienced in annuity transactions can help you model out the impact and explore ways to minimize it.

Disclaimer: The tax information above is general in nature. Annuity Freedom is not a tax advisor. Please consult a qualified tax professional before making any decisions.

What are the drawbacks to selling an annuity?

• You will receive less than the total face value of your future payments.
• Structured settlement sales may involve surrender charges of up to 10%.
• You give up guaranteed future income.
• There may be tax consequences depending on your annuity type.

Understanding these tradeoffs before you sell is exactly why we recommend speaking with a financial professional first.

How do I choose an annuity buyer?

Not all factoring companies operate the same way. When evaluating buyers, look for:

1. Transparent pricing — the quoted price should be what you receive at closing, with no fees deducted.
2. Free quotes — any reputable buyer provides quotes at no cost and with no obligation.
3. Experience with court approval — for structured settlements, your buyer should handle the entire court process on your behalf.
4. Clear timelines — you should know upfront how long the process will take and when to expect your funds.
5. Willingness to explain the discount rate — if a buyer won’t show you how they calculated your offer, that’s a red flag.

How can I avoid annuity scams?

Before you sell, know the warning signs:

• No legitimate buyer charges a fee to provide a quote. All quotes from Annuity Freedom are free and no-obligation.
• Be wary of unusually fast court approval promises. Structured settlement sales typically take 45 to 90 days through the courts — anyone promising significantly faster should raise a flag.
• There is no such thing as a “structured settlement loan.” Companies that use this term are buying your payments, not lending against them. You will no longer receive your periodic income.
• Watch for surrender charges. If you purchased your annuity recently, your contract may include a surrender period with associated fees. The Investors.gov resource on advance fee fraud is worth reviewing before you sell.

How to sell payments: A 5-step process

• Consult a financial professional. A CPA, tax attorney, or certified financial planner can help you understand the tax implications and whether selling is the right move for your situation.
• Get quotes. Contact several factoring companies, including us. We offer free reviews of your payment schedule so you know what your annuity is worth before you commit to anything.
• Review your offers. Every offer will be less than the total value of your future payments — that’s how buyers profit. Focus on the discount rate, the total lump sum, and whether the offer meets your actual financial need. Ask any buyer for a full breakdown of how they calculated their quote.
• Finalize your deal. Read all paperwork carefully before signing. Keep copies of every document for your records.
• Receive your funds. Investment annuity sales can close in as little as two weeks. Structured settlement sales typically take longer due to court approval. We’ll keep you updated on timing throughout the process.