Facts About Fixed Annuity

in Annuity

 

 
Annuities are used to provide a future benefit in the form of a stream of payments. These payments are made within one year, in the event of an immediate annuity. You can also take place at a later date, more than a year, as it slid into a pension.
 
A fixed annuity is different from variable annuities, because the insurer earns back the interest rate. A variable annuity is invested to the owner, the payments in the market for a potentially higher return. This also means that the holder of a variable annuity has a much higher investment risk. As such, variable annuities, fixed annuities security products not registered. A fixed annuity is the equity indexed annuity and not as collateral.
 
Fixed annuities are two distinct phases: accumulation and annuity. During the accumulation phase or construction, are the payments made and grows on a tax-deferred basis. If the owner decides income, the pension is "annuitize" or pay-out. Payment can take at one time or over many years on the life of a pensioner. The pensioner is similarly insured in a life insurance policy.
 
Annuities are often compared to mutual funds and other investment products. This is a mistake, because there are stark differences between the two. To begin, are not fixed annuity investment products. They provide a way to defer income for a certain time. Your return is guaranteed unique and not found with the mutualFunds, which face the market risk. A fixed annuity, the mortality and expense charges, which are not found in plant products.
 
An initial payment of an annuity may be made at once or over a series of claims. These are individual pay and fixed pay or pensions. Annuities enjoy tax benefits during the accumulation phase and should not be used until the age of 59 and a half. Money before that age can be used for purposes other than a special need, result in penalties and costs. Annuity contracts have a lot of festivals, what is known as surrender charges. A surrender charge is a reduction of the fee, based on the number of years money is kept. You can be as high as 30 percent and up to 20 years.
 
Fixed annuities are useful in planning for such events in life than to retire. They can also be used to distribute lump-sum payments such as inheritances or processes. These are special festivals known as structured settlement annuities, pensions. A fixed annuity is calming to a person who is uncertain about the market. They tend to compete with banks certificates of deposit, but again are unique products.
 
When considering the purchase of a fixed annuity contract, you should use a licensed insurance agent or financial advisor. A competent agent or consultant, you can use the comparative information available to help and the appropriate product. A fixed annuity can be a valuable addition to your product businesses.
Author Box
Anna Thomson has 1069 articles online and 3 fans

For more information on this subject please check out aa home emergency!

Add New Comment

Facts About Fixed Annuity

Log in or Create Account to post a comment.
     
*
*
Security Code: Captcha Image Change Image
Related searches:

Facts About Fixed Annuity

This article was published on 2012/01/19