An annuity is a contract with an insurance company. The insurance company agrees to provide a stream of income to the individual in exchange for payment. The holder of the annuity cannot outlive the regular income from the investment which makes this attribute especially unique. Therefore, annuities are used as an asset to fund retirement. Another advantage is the investment gains accumulate and compound tax deferred.Making money and good investments concept
Researching for the best annuity rates can be a time consuming task. An important thing to remember is that an annuity will usually start with a great rate, but then it will begin to fall after the first year. It is important to do your due diligence of the many financial institutions that offer annuities in order to find the one that will give you the best investment for the entire length of the contract. Fortunately, finding rate comparisons is easier than ever before with the internet as a powerful tool.
Annuities are either classified as immediate or deferred. The immediate variety will begin to pay you at regular intervals after you have made the initial investment premium. In this case the annuity rates you receive will be largely based on your age, gender, and the particular plan you have chosen. The alternative, deferred annuities must be paid into over a set period as defined in your contract. While each of these plans is different, there are some that function in a similar fashion to a CD in that the period of guaranteed interest is equal to the period of surrender penalty.
It can be an exhausting and time consuming process to research all the different annuities that are available, and as such there are plenty of opportunities for the investor to make mistakes. One of the biggest of these is neglecting to thoroughly compare the different annuity rates that are offered. This is one reason why it is important to plan ahead and seek the assistance of financial professionals when needed. Another matter that confuses things is that there are many different types of annuities available. These include single payment, flexible, payment, fixed plans, variable plans, and more.
While it is possible to manage your own investments, it is recommended that you find a trusted financial advisor who is able to answer questions you may have and help you make the best decisions. These professionals are not linked to any specific firm and their advice is completely impartial and always in your best interest. They can provide you with the annuity rates from several different insurance companies and will even contact these firms directly in order to negotiate the best deals for you. In most cases they will also investigate these companies to determine how well they are doing financially. If you are interested in an Annuity Rate Comparison report click here.
Because insurance annuities may feature an excellent rate to start out with only to change it to a less favorable one later on, it is important that investors know ahead of time that they are able to trade in their policy with another company if they so choose and there are no penalties to pay.
Lisa Cintron is a Social SEO Consultant and Digital Marketer. She specializes in the annuities industry.