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What is an annuity?
An annuity is a long-term,
interest-paying contract offered through an insurance company or financial
institution. An annuity can be "deferred" as a means of accumulating
income while deferring
taxes, or it can be "immediate" meaning it pays you income now
at fixed or variable interest
rates as long as you are living, contact your insurance agent for details
on current rates.
The Opposite of Life
Insurance
Annuities are sometimes
described as the opposite of life insurance. Annuities protect
you from living too long,
while life insurance protects you from dying too soon. Meaning with an
annuity you are paid as long as you live, but with a Life insurance policy
you are only paid when
you die.* With an annuity, the financial risk of living too long
is transferred to the insurance
company.
* some life insurance
policies may allow you to collect money while living.
Banks, stockbrokers, savings and loan institutions and other financial
service providers can
sell annuities, but only insurance companies can issue annuities.
A Lifetime Income
With the average retirement
period lengthening, annuities are increasing in importance. Only
an annuity can pay you an income you can't outlive, even after all money
you put into the annuity
has been exhausted. Therefore, annuities can help you mange your cash
flow, and provide a safe
and competitive means to accumulate funds.
What
is a CD?
Do
you have any tips to help me manage my investing?
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