Exploring The Different Types Of Annuities Insurance
All types of annuities have guarantees and insurance
. Fixed annuities' insurance is the insurance that covers all insurance companies, just like any other insurance product. It also contains guarantees, which is similar to insurance. The guarantee is that your base premium won't fluctuate in value but simply increase with interest additions.Fixed annuities are similar to CDs They offer a specific interest rate and apply that to your principal on a regular basis. Like CDs, there's no worry when the market goes south since the funds you receive have no tie to the stock market but are from the general funds of the insurance company.
A variable annuity, however, is quite different. First, the growth of the annuity depends on the investment outcome of the funds you selected. You have a multitude of choices on many variable annuities. You don't have to put all your money into one of the many mutual funds offered; in fact, it's not wise to do. Many of the variable annuities have a preselected collection of funds, which are suitable for people at different ages and risk tolerances. The insurance company does not hold the funds in this case, unless you select the fixed fund offered by many variable annuities.
Variable annuities' insurance is similar to that of the fixed but adds additional annuities insurance. Since the principal does fluctuate, there are riders you purchase that guarantees the safety of the principal as long as you hold up your end of the bargain and only remove a specific amount of income at specific times.
Indexed annuities work similarly to both the variable annuity and the fixed annuity. The indexed annuity offers a base return and guarantees you'll never receive a lower interest rate. This return is less than the interest guaranteed on the fixed annuity; as well it should be, since you have an additional opportunity for growth. The indexed annuity also offers you the potential of sharing in the profit when a specific index named in the policy, increases in value. Many of these are S&P 500 or foreign market indexes.
Indexed annuities insurance, again is similar to the variable and fixed annuities. They use the state guaranty association to protect the assets of the insurance company. However, because the contract ties the return to a fluctuating market index, you have additional annuities insurance. You have the guarantee that your funds will get a minimum interest outlined in the contract.
There is an annuity designed to fit most every program and need. If you want an income, an immediate annuity is perfect for your situation. These annuities insurance to you is that you'll have an income you cannot outlive if you select one of the life options for annuitization. If you want a specific payment over a certain number of years, that option is also available.
No matter which of the annuities insurance or annuities you find best for your situation, most people believe they are valuable additions for their financial program. In order to find the best annuity for your situation, it's always best to compare rates online or get the advice from a competent annuity specialist.
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