Annuities Explained – A General Overview

annuities explained

The biggest draw to investing in life insurance annuities is that your income can be guaranteed for life.

The benefits of understanding and having annuities explained to you properly are many.  When it comes to making a smart addition to your financial portfolio, life insurance annuities could fulfill that requirement.

Clearly, you have questions about annuities that you want answered before you choose this investment option. If you are curious about the rates and want these explained, you will need to consult with your insurance company in order to gain an understanding about how different annuities can affect your financial payout.  As far as having annuities explained in a general sense, you are in the right place.

The biggest draw to investing in life insurance annuities is that your income can be guaranteed for life. After you have retired, managing your money can be overwhelming and discouraging.

This kind of investment before you retire, however, offers you the opportunity to benefit from an effective, simple way to enjoy your money after retirement. Once you no longer have a job that provides you with a regular income, your investment in annuities will offer you that guaranteed income to make budgeting after retirement possible.

What you can expect to receive each month are the annuity rates. These are dependent upon the variety of investment you have chosen.  For example, one variety is called fixed deferred annuities. These guarantee an income for the length of the insurance contract unlike something such as a SEP IRA.

There are also variable annuities, which are not provided at a guaranteed rate. They fluctuate, which means they could lower or go far above the premiums, meaning a great financial benefit for you in this kind of annuity.

To receive the highest rate possible, you will need to shop around. Compare securities that different insurance companies invest in that will provide you with a high return on your investment, thus providing you with your monthly income.

Varying investment strategies are used by different insurance companies, some even purchase structured settlements as part of an overall investment plan, but if you have investing experience, you will be able to tell which ones have the potential to offer you a better return for your money.

Before you make the commitment to any kind of annuities, ask specific questions of the insurance company about the rates. They may change when the recipient passes away or if it continues for a spouse or heir of the annuity.  You must understand if your income will be guaranteed each month or not as well.

These rates are important in making your investment decision, which all savvy investors understand, and one should not expect a full understanding of this investment approach overnight.  Do your research.

Talk to more than one investment adviser or company and let all of the investment and retirement ideas you hear about settle in your brain until you have a confident mindset about where your money is going and what to expect as far as income from your investments in the future.

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