When an employee retires after several years of work, the employer offers some financial monetary retirement benefits, like a pension or cash balance plan, as a gesture of gratitude for the employees service. Many retirees invest their retirement package in insurance companies by signing an agreement, according to which the insurance company acquires their retirement package and in return makes periodic payments to the retirees, who are the investors. That is, the insurance company sells annuities to the retirees.

Although by buying an annuity the investor [retiree] is guaranteed periodic income, theres one problem. Can the retiree use his annuity for an immediate financial need, like medical treatment? Although his whole retirement benefit package is with the insurance company, he cannot withdraw any part of the amount during the agreed time period, known as the surrender period, without paying surrender charge fees as a penalty. Suppose he bought an annuity with a 5-year surrender period. If he wants to withdraw some amount, he may have to pay a 5 percent fee in the first year, 4 percent during the second year, and so on.

Considering this difficulty, the Federal and state governments have introduced provisions so that retirees can sell their annuity payments and obtain immediate cash. There are several finance companies that can buy a persons annuities and pay them back in terms of immediate cash. The process works as follows:

The person approaches any appropriate finance company that can buy his annuity. The company offers several options that meet the persons financial needs. Once the person selects the option, the company completes the application process. The applicant is provided with a disclosure statement and a contract, which he will sign and get notarized. The finance company collects the contract along with relevant documents, processes the application and submits it for approval to the court. The court reviews the application to confirm if it is in the best interests of the applicant. The companies are expected to follow all relevant state and federal laws in the process.

Once the court approves the application, the finance company notifies the applicants insurance company of the transfer. Cash is transferred to the applicant in just a few days. The retiree can use this money to meet any of his immediate or unexpected financial needs.