Benefits of Immediate Annuities
Nov 19, 2008 in
Annuities
Joe William asked:
Annuities are an investment option that has been around for quite a while, but there are many different kinds available this day. An immediate annuity is only one type, but it could be the ideal choice for you. Read on to see if this might be the case.
In an immediate annuity, you make a payment to an annuity insurance company, and you start receiving payments immediately (hence the name). If you had chosen a deferred annuity investment, payments don’t begin for a pre-specified amount of time, which can be anywhere from a few months, or a year, or even a couple of decades. The interest rate is lower on immediate annuities than other types, such as variable rate and deferred annuities, but the main benefit is that it begins paying you right away. There are also other advantages to an immediate annuity.
Prime Candidates for Immediate Annuity
Because of the lower interest rate, some people might shy away from this type of annuity, but it is actually a good choice for someone who has just come into a large sum of money and isn’t sure what to do. An inheritance, lottery winnings, or a settlement are all good examples of money that could be put to better use in an annuity. The annuity gives people a way to measure out their money over a long period so that they do not spend it all immediately and regret it later.
There are two types of immediate annuities available: fixed-rate and variable-rate. Most people choose the fixed-rate option because they are guaranteed that every payment will be for exactly the same amount, which provides a great measure of security and peace of mind. However, the variable-rate option carries a greater equity and can have a better interest rate.
Immediate Annuity Benefits
An immediate annuity can be set up so that you receive payments for only a specified amount of time or for the rest of your life. Besides that, there is no need to manage a portfolio with this type of investment. You’ll start receiving your payments immediately upon investing, and you can set your payment terms so that you receive the payments in the manner that best suits you: monthly, quarterly, bi-annually, or annually.
As with all annuities, there are different types of immediate annuities to pick and choose from, so select an annuity company who can fully explain the different kinds and help you pick the best one for your situation. There are several strange-sounding terms such as “survivor” and “joint” annuities, or “straight life” annuities, and “index” annuities, but the company should be able to guide you through the process of choosing the right one.
Research several different companies, and go with the one who seems the most informative and offers the best rates. Don’t be afraid to take your time, so you can make the ideal choice and have a secure financial future.
Caffeinated Content
Annuities are an investment option that has been around for quite a while, but there are many different kinds available this day. An immediate annuity is only one type, but it could be the ideal choice for you. Read on to see if this might be the case.
In an immediate annuity, you make a payment to an annuity insurance company, and you start receiving payments immediately (hence the name). If you had chosen a deferred annuity investment, payments don’t begin for a pre-specified amount of time, which can be anywhere from a few months, or a year, or even a couple of decades. The interest rate is lower on immediate annuities than other types, such as variable rate and deferred annuities, but the main benefit is that it begins paying you right away. There are also other advantages to an immediate annuity.
Prime Candidates for Immediate Annuity
Because of the lower interest rate, some people might shy away from this type of annuity, but it is actually a good choice for someone who has just come into a large sum of money and isn’t sure what to do. An inheritance, lottery winnings, or a settlement are all good examples of money that could be put to better use in an annuity. The annuity gives people a way to measure out their money over a long period so that they do not spend it all immediately and regret it later.
There are two types of immediate annuities available: fixed-rate and variable-rate. Most people choose the fixed-rate option because they are guaranteed that every payment will be for exactly the same amount, which provides a great measure of security and peace of mind. However, the variable-rate option carries a greater equity and can have a better interest rate.
Immediate Annuity Benefits
An immediate annuity can be set up so that you receive payments for only a specified amount of time or for the rest of your life. Besides that, there is no need to manage a portfolio with this type of investment. You’ll start receiving your payments immediately upon investing, and you can set your payment terms so that you receive the payments in the manner that best suits you: monthly, quarterly, bi-annually, or annually.
As with all annuities, there are different types of immediate annuities to pick and choose from, so select an annuity company who can fully explain the different kinds and help you pick the best one for your situation. There are several strange-sounding terms such as “survivor” and “joint” annuities, or “straight life” annuities, and “index” annuities, but the company should be able to guide you through the process of choosing the right one.
Research several different companies, and go with the one who seems the most informative and offers the best rates. Don’t be afraid to take your time, so you can make the ideal choice and have a secure financial future.
Caffeinated Content
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One comment
Term Life Insurance PopStar on November 19, 2008 at 5:14 pm
I like your article. Annuities are something I don’t know that much about, but I do know that people with annuities are doing better than those who had their money in mutual funds. However, in economic times of growth, a mutual fund can in many instances get you a better rate of return.