Caution: Not All Annuities Qualify
Just because you own an annuity doesn't mean you can always convert it into cash to help you save for the future, invest in a new company or spend it on your kids.

Annuities that are in a tax-qualified retirement plan are ineligible; so, too, are life-only immediate annuities, since the payments are based solely on your life expectancy and are, therefore, not guaranteed.

Before selling your annuity on the secondary market, take these four cautionary steps: 

1. Contact the company that sold you the annuity. As the industry continues to add more options, you might discover that your annuity has a payout feature you never knew about.
2. Contact your financial advisor or insurance agent. He or she should be able to explain your options and help you get the best offer on the secondary market.
3. Think about how much cash you need. You might only have to sell off a portion of your annuity. Then you could let the balance grow tax-deferred or even delay the payments.
4. Find out how much you will owe in income taxes if you sell your annuity. Don't wait until you get the check in hand. By then, it's too late, and you might end up sending a big chunk of what you just received to the IRS.