What Type Of Annuity Is Best For Your Needs?
Are you thinking about buying an annuity? Before you make a decision - is it suited to your situation - search some main terms. Make no mistake.
What is an annuity?
How are annuities different from life insurance?
What is a deferred annuity?
What is a immediate annuity?
In its most general sense, an annuity is an agreement for one person or organization to pay another a stream or series of payments. Usually the term “annuity” relates to a contract between you and a life insurance company, but a charity or a trust can take the place of the insurance company.
Both annuities and life insurance should be considered in your long-term financial plan. While both include death benefits, you buy life insurance in the event you die too soon and an annuity in case you live too long. In other words, life insurance provides economic protection to your loved ones if you die before your financial obligations to them are met, while annuities guard against outliving your assets.
There are two main types of annuities-deferred and immediate. There are two main types of life insurance-term and whole life.
A. The main reason for buying term life insurance is to provide income for dependents. Pays out when you die.
B. The main reason for buying whole life insurance is to provide income for dependents or meet estate planning needs. Pays out when you die, borrow the cash value or surrender the policy.
C. The main reason for buying deferred annuities is to accumulate money in a tax-deferred product. Pays out when you make withdrawals
D. The main reason for buying immediate annuities is to assure you don’t “outlive your income”
Pays out when one period after you buy the annuity, stops paying when you die* There are many categories of annuities. They can be classified by:
Primary purpose - accumulation or pay-out (deferred or immediate)
Nature of the underlying investment - fixed or variable
Nature of pay-out commitment - fixed period, fixed amount, or lifetime
Tax status - qualified or nonqualified
Premium payment arrangement - single premium or flexible premium.
I’m recommending “The Shocking Truths” report. It is useful in keeping a friend from buying something totally unsuited to his situation. I’m confident that it will save them many dollars of grief. Avoid misguidance, poor judgment, and flat-out lying. Don’t be hurt by agents and insurance companies.
