Whether you can sell an annuity for cash depends entirely on which kind you hold, and the two are governed by completely different rules. An annuity you bought yourself is your property and you have options with the issuer. An annuity funding a structured settlement is not yours, and the only route is a court-approved transfer of the payments.
If you own the annuity
An annuity you purchased is a contract you own, and the issuer will usually let you surrender it for its surrender value, take partial withdrawals, or in some cases exchange it. Surrender charges and tax consequences apply, and in the early years those charges can be severe, but the transaction is between you and the insurer and no court is involved. Whether that is a better answer than a sale is a question for a licensed adviser on your own numbers.
If the annuity funds a settlement
Then you are the payee and not the owner, there is nothing to surrender, and what you can sell is the right to receive the payments. That sale is governed by your state's Structured Settlement Protection Act, requires advance court approval, and prices at a discount. This is the route most people searching this phrase are actually on, and it is why the first question any honest buyer asks is where the annuity came from.
What a Texas court has to find
Texas puts the requirement in the form of an effectiveness rule rather than a penalty. No direct or indirect transfer of structured settlement payment rights shall be effective and no structured settlement obligor or annuity issuer shall be required to make any payment directly or indirectly to any transferee unless the transfer has been approved in advance in a final court order based on express findings by the court. Those findings include the best interest of the payee, taking into account the welfare and support of the payee's dependents, and that the payee was advised in writing to seek independent professional advice.
Questions people ask about sell annuity for cash
Does a court really have to approve this?
Yes, in every state. The federal exception in 26 U.S.C. 5891(b) applies only where the transfer was approved in advance in a qualified order finding it is in the best interest of the payee, taking into account the welfare and support of the payee's dependents.
What is the single biggest variable in the price?
The discount rate, and after that how far in the future the payments fall due. The reported range across the market is between 9% and 18%.
Do you take a share of what I get?
No. Buyers pay a flat fee for the enquiry itself, never a share of the discount and never anything contingent on a transfer completing.