In today's market economy, where stocks are starting to get on a wobbling ground and the real estate market sinking, investors and other money patrons are looking for another way to put their investments in and reap hefty returns in the process. This is where annuity comes in. Basically, an annuity is a form of contract between an insurance company and an investor to reimburse a certain amount of money over a period of time, depending on the conditions and terms set by the two parties. There are several terms and conditions that may come in annuities contracts, but the most basic are the Income Annuities and Variable Annuities contracts.
Income Annuities basically is the simplest. It can be understood more like corporate pension that can be received monthly over a period of time, depending on the terms and conditions or if the investor chooses, it can be extended for life. The difference between a corporate a pension and an annuity income is that the insurance premium will be paid by the investor and not the corporation. If the provision included in your policy is an income for life, as long as you live, you will be able to receive a monthly income from the insurance company. Most of the time, this particular annuity is an advantage for the insurance company, since they are betting on the fact that eventually, the investors will die way before he earns back the amount of premium he paid for his insurance. But, on the other hand, it can also provide benefits for investors, like having a secured future and peace of mind with a fixed monthly income overtime. With a guaranteed monthly income, depending on the premiums the investor paid, they can enjoy a better life, even in their age where jobs will surely be unavailable to support their living expenses.
Although Income annuities can also be compared to Bank CD's, this particular contract is more focused on retirement and it has a much higher liquidity. For investors who are already on retirement, this particular contract can be a good way to earn a monthly income.
Another form of annuity contract is the Variable Annuities. Typically with this contract, variable annuities combine the insurance section of annuities and the factors of investing in the market. On average, variable annuity contracts serve as a binding agreement for varied investment portfolios, bonds, stocks, or other type of assets, like real estate for instance. Whatever profits gained from this particular annuity investment are divided by the investor and the insurance company on an agreed percentage or predetermined conditions.
In most cases, the best annuity contract will depend on the age and requirements of the investors. For those nearing retirement or who are already enjoying retirement, the best option is the income annuity, since it has fixed costs depending on the premiums of the security income. If you as an investor have more years ahead of you, choosing a variable annuity contract is probably a more practical option, since you will be able to have the option for a higher growth in savings. Although it is complicated in some ways and it often carries large costs and varying expenses, the investor will still have access on different investment options that can promise huge returns whenever the venture is successful.
Income Annuities basically is the simplest. It can be understood more like corporate pension that can be received monthly over a period of time, depending on the terms and conditions or if the investor chooses, it can be extended for life. The difference between a corporate a pension and an annuity income is that the insurance premium will be paid by the investor and not the corporation. If the provision included in your policy is an income for life, as long as you live, you will be able to receive a monthly income from the insurance company. Most of the time, this particular annuity is an advantage for the insurance company, since they are betting on the fact that eventually, the investors will die way before he earns back the amount of premium he paid for his insurance. But, on the other hand, it can also provide benefits for investors, like having a secured future and peace of mind with a fixed monthly income overtime. With a guaranteed monthly income, depending on the premiums the investor paid, they can enjoy a better life, even in their age where jobs will surely be unavailable to support their living expenses.
Although Income annuities can also be compared to Bank CD's, this particular contract is more focused on retirement and it has a much higher liquidity. For investors who are already on retirement, this particular contract can be a good way to earn a monthly income.
Another form of annuity contract is the Variable Annuities. Typically with this contract, variable annuities combine the insurance section of annuities and the factors of investing in the market. On average, variable annuity contracts serve as a binding agreement for varied investment portfolios, bonds, stocks, or other type of assets, like real estate for instance. Whatever profits gained from this particular annuity investment are divided by the investor and the insurance company on an agreed percentage or predetermined conditions.
In most cases, the best annuity contract will depend on the age and requirements of the investors. For those nearing retirement or who are already enjoying retirement, the best option is the income annuity, since it has fixed costs depending on the premiums of the security income. If you as an investor have more years ahead of you, choosing a variable annuity contract is probably a more practical option, since you will be able to have the option for a higher growth in savings. Although it is complicated in some ways and it often carries large costs and varying expenses, the investor will still have access on different investment options that can promise huge returns whenever the venture is successful.
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