Annuities – Types of Annuities – Annuity Rates

Are you considering Annuities as an investment?  We provide you relevant information to help you make that decision.  Are Annuities Safe ? American investors are a bit shy when it comes to their investment dollars these days. Whether or not you believe the economy is getting better, or getting worse, or pretty much holding its own, the fact is investors lost nearly 35% on average of their investment dollar between September 2007 and December of 2008. That in and of itself would lead to caution for many people when it comes to investing in any type of investment vehicle.

No one is sure in this kind of a market where to put their money and more importantly where to put their retirement money. That quite naturally leads investors to seeking a safer type of investment and investing in annuities fits that criteria. Annuities sometimes get a bad reputation, more often than not it is undeserved. Annuities are issued by insurance companies and insurance companies are generally safe during any kind of economy. That does not mean that there will not be insurance company failures, but by and large insurance companies offer conservative investment options they carry very little risk.

When compared to banks and brokerage firms insurance companies historically have a record of stability. No matter the economic situation in America insurance companies have always survived.

Which brings us to the question, what makes an annuity a safe investment? Insurance investment products come under more scrutiny than many other investment products. Each investment product offered by an insurance company must be approved by a state insurance Commissioner. That means an impartial entity has more or less looked over the product to help the consumer. That doesn’t mean investing in annuities is foolproof, but it does lessen the risk.

Fixed rate annuities offer a guaranteed minimum rate of interest, albeit that may be too low for some investors, but the more conservative or apprehensive investors find it quite appealing. These guarantees apply in good times and bad times. Fixed annuity holders don’t lose money even when the market loses.

The benefits to investing in annuities are significant. They include Intel tax deferral into withdrawal, penalty free withdrawals to cover emergencies that may occur, protection from creditors in most states in qualified plans, complete control over your money if your family circumstances change, probate fee transfers at death, and the right to convert your annuity to a guaranteed lifetime income.

It is likely that you will hear that investing in annuities and in particular fixed annuities or index linked annuities are not a good investment. It is even more likely that those rumors come from stock market brokers. It is quite simple stock market brokers would rather sell you stocks. Ultimately for the conservative investor, you must make a decision based on your risk and risk tolerance.

Annuities offer stability, safety and security. They will not produce large double-digit gains that high-flyer stocks sometimes do. However with that comes the knowledge that they do not produce double digit losses either. Are annuity safe? It is best to talk to your financial adviser or insurance agent about the advantages that annuities have to offer.

Basics Of Annuities

In order to buy annuities you need to be as informed as possible about them. The definition of an annuity is an investment that pays you a particular amount of money on a monthly basis. Many people buy annuities because they are a guaranteed income source for the duration of their lifetime and selling annuities is very easy

An annuity is comparable to life insurance but it works the opposite. When you buy life insurance you make a monthly payment toward it for a set number of years. When you die, your family members will receive a lump sum payment from the insurance company. When you buy an annuity you buy it as a lump sum and from this you receive income every month over a period of a specified number of years.

The monthly payments you receive when you buy annuities have to do with the interest rates at the time of purchase. In other words, when interest rates are high and you buy, your monthly annuity payments will be high. For this reason it is not recommended that you buy annuities when interest rates are low. Here is some help, annuities explained

Types of Annuities

Be aware that when you decide to buy annuities there is more than one type to choose from. It is also important to note that the type you choose to purchase can affect the monthly income you will get from it. Let us take a closer look.

Term-Certain Annuities

When you buy annuities, you might want to look at term-certain annuities. This type guarantees you a specific income on a monthly basis for as many years as you so choose. However, you cannot continue the annuity past the age of 90 years. If you die before the end of the annuity’s term then the remainder of your payments become a part of your estate.

Life Annuities

Another option when it comes to buying annuities is life annuities. As the name implies, this type of annuity guarantees you a monthly income for your entire lifetime. When you buy annuities you have the option to add certain criteria to the agreement such as buying an annuity that continues to pay money to your spouse in the event of your death.

When you buy annuities you are essentially buying them in order to have a guaranteed income. An annuity can be a big help to you and your family if you should lose your job or be unable to work for a period of time due to illness or an injury. Before you buy annuities talk with a financial expert to learn as much as you can about interest rates and how they can play an integral role in your monthly annuity income.

Annuity Rates and Factors that Can Affect a Monthly Annuity Income

To buy annuities is to provide yourself with peace of mind. For many people this is a worthwhile reason to go ahead and buy annuities. It makes sense that when you pay out your hard earned money to buy annuities you want to receive the highest monthly income from them that you can.

There are certain factors that affect the income that you will bring in when you buy annuities. They are listed below.

Gender

Females will receive smaller monthly incomes than will males of the same age due to the fact that their expected life span is greater. Bear this in mind when you buy annuities.

Age

The older you are when you buy annuities, the more you will receive monthly because your life expectancy is shorter. For example, a 30 year old will receive a smaller monthly income than will a 50 or 60 year old.

State of Health

When you buy annuities your health makes a difference. Those who have problems with their health will receive more money because they are not as likely to live as long as their healthy counterparts.

Annuity Type

A basic annuity that covers just yourself will bring you in the highest income. If you add any extra options when you buy annuities this will reduce your payments. The reason for this is due to the fact that add-ons increase the costs that must be covered by the insurance companies.

Interest Rates

You will get more for your money when you buy annuities when interest rates are high.

Length of Annuity

When you buy annuities you need to figure out how long you want them to last. Some annuities end upon your death while others continue to pay out to your spouse or children after you die. You will receive lesser amounts in terms of monthly payments if you choose for your payments to continue after your death.

Money Saved for Annuity

When you choose to buy annuities how much money have you saved to put into them? The more money you can put toward the annuity the more that you will then get back in terms of monthly payments.