You would definitely want to wipe-clean all personal data from your phone like address-book, messages, camera-roll etc. before selling or handing over to somebody, we have shared a tip for jail-broken phones allowing users to erase iPhone contacts with ease. iOS also comes with a built-in iPhone personal data eraser functionality which takes care of wiping-off all the personal data from your device, the problem is if you have an jailbroken iPhone your device will not boot-up after using this functionality - and if you don't have your SHSH blobs saved you will need to force-update to current iOS version which might mean permanent loss of carrier-unlock..

If you HAVE NOT jailbreaked your phone you can safely use this feature by accessing this setting from Settings -> General -> Reset -> Erase All Contents And Settings as shown below.