Selling Annuity Payments to Retire Debt

There is a lot of conflicting advice these days about selling an annuity insurance policy or getting a loan against it. Your decision needs to be based on several factors, including your age, the age of the annuity, the amount of the annuity and the reason or urgency you are needing to get cash from it.

The other thing you need to take into consideration is the fact that if you sell it, you will not be realizing the full value of the policy. Whereas if you were to get a loan against it at a reasonable rate of interest you could keep your policy to be terminated at the time it is due and in doing so, realize the full value.

As interest rates on loans are still pretty low in most countries, this could be the preferable option if you could find a lender to loan against it by using it as collateral. After all, it is an asset and you don't want to sell it off too cheap because you can only sell it once whereas if necessary, you could use it again as collateral if you ever needed to. These are important things to keep in mind.

The hardest part may be to find a bank or other financial institution who will loan against your policy. If you intend to pay off other loans, that is, to retire debt and particularly debt at the same financial institution that you approach for the loan, they may well be interested in doing this for you. This could well be a good financial decision if you can get the loan repayments against the insurance policy at a much lower rate of interest than you are currently paying against your existing loans.

The decision is not an easy one for you but sometimes, as my Grandmother used to say "There are more ways than one to skin a cat" and keeping assets as long as possible is always a good financial decision.