What Investors Should Know About Buying and Selling Annuities
With sales topping $200 billion annually, according to the NAVA 2006 Annuity Fact Book, annuities have become one of the most successful financial products of the last 10 years. As part of its ongoing educational effort, specialty finance company J.G. Wentworth, a leader in the secondary market for annuities, has published a white paper entitled What Investors Should Know About Buying and Selling an Annuity. The paper addresses the reasons behind why consumers buy annuities as well as what pushes them to sell their policies.
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As a result of its ongoing contacts with financial advisors, brokers and agents within the annuities industry, J.G. Wentworth’s paper offers insights into the advantages and disadvantages of buying an annuity as well as the issues investors should be aware of when considering selling their policy.
We had heard about annuities and were investigating them for our IRAs. We also heard bad things about pushy brokers over the years. So when we went to the ImmediateAnnuities.com site we were skeptical about calling them. But whenever we called their staff was really friendly. They answered all our questions and one of their reps even told us that at our ages there was no advantage to buying the annuity with our IRAs. These guys are really honest!
According to Michael Vaughan, Managing Director of the J.G. Wentworth Annuity Purchase Program, "Individuals are looking to have more control of their assets. Annuities tend to lack liquidity and flexibility; therefore, consumers feel once they purchase a policy, there is no way out, should they need the money later. With the emergence of the secondary market for annuities, consumers who decide to buy a policy now have ’peace of mind,’ as they can cash in their policy if they are faced with unexpected financial circumstances and need to sell their policy for a lump sum."
The paper suggests that while consumers need to do their research when looking to buy annuities, they should also find out what their options are when considering selling their policy in order to get best value for their policy.
Source: jgwentworth.com - 04/17/2007