There are many myths surrounding selling annuities. Some people believe they are a scam, while others think that they are only for wealthy people. The truth is that selling annuities can benefit anyone who needs to receive a settlement payment. The most common myths about structured settlements include the following:
Myth #1: It is meant for minors and disabled claimants
Structured settlements can be used for any claimant, regardless of their age or ability. All claimants are legible for selling annuities to meet all requirements. Some of the essential requirements are:
- The claimant must be the rightful owner of the annuity
- The claimant must be able to prove that they received the settlement through an accident or injury
- The claimant must be able to prove that the annuity is not already in use
- The claimant must be able to provide a copy of the annuity policy
Myth #2: It is a scam
Many people believe that structured settlements are a scam. This is not true. Structured settlements are legal and allow claimants to receive payments promptly. Many claimants have received their payments and have used them for their personal needs.
Myth #3: Selling annuities is a difficult process
Selling annuities does not have to be complicated, nor does it take long for the claimant to receive their money. It takes a few simple steps, and the claimant will receive their money on time. Ensure you have all the necessary documentation before you begin the process. This will ease the process and make it faster. However, some structured settlements can last years. If you are looking to sell your settlement, it is important to have an attorney who will help guide you through the process.
Myth #4: You are not able to sell your annuity if it has been in existence for less than three years
This is not true. You can sell your annuity if it has been in existence for less than three years. The only exception would be if the claimant were a minor when receiving the settlement. In this case, the annuity must have been in effect for at least five years before it can be sold.
Myth #5: Returns of selling annuities depends on market conditions
Structured settlements are stable, and they are not affected by market conditions. The claimant’s payments are guaranteed and will not change, regardless of what is happening in the market. This makes selling annuities a safe investment for anyone who needs payment. The returns are locked in and will not fluctuate, even when other assets lose money.
Myth #6: The claimant has to pay taxes on their payments
The claimant does not have to pay taxes on their payments from a structured settlement. The payments are technically not considered income, and they do not fall under taxable income. However, they are subject to a few other taxes. The claimant will have to pay state and federal income tax on their secondary employment earnings, as well as any dividends from stocks or interest from bonds.
Myth #7: You must have an attorney to sell your annuity
This is not true. You do not need an attorney to sell your annuity. You can sell your annuity on your own or work with a third party. However, it is recommended to have an attorney to help you through the process. The attorney will help you answer any questions you might have and guide you through the steps. When working with a third party, it is important to make sure they are reputable and have your best interests in mind.
Myth #8: ROI on selling annuities cannot match traditional investment
The return on investment for selling annuities is higher than many traditional investments. Most annuities do not attract overhead costs and taxes. They also offer liquidity, which most traditional investments do not have. This makes the return on investment for selling annuities a sound investment choice.
Myth #9: Selling an annuity will affect my credit score
Selling an annuity will not affect your credit score. The only thing that might happen is that you will have to close your account with the structured settlement company. This is a simple process and will not impact your credit score.