Variable annuities are a popular choice for a lot of individual’s financial plan. The reason as to why these annuities are so popular is because of the guarantees offered. The guarantees offered come in both death and living benefit form. Regardless of the stock market performance, for the death benefits guarantee, the beneficiary will be awarded a specific amount. For the living benefits, the guarantee will make sure the owner does not lose if the stock market or any other investments go below freezing.
There are different types of variable annuities and they are not all alike. Each one of them has different surrender periods, funds, charges and guarantees. The interior charges hooked to it will have an affect on the return of the investment. In order to find the best one, you should take the time to compare the rate you would receive if you invested in the said product. Many companies will give you hypotheticals based on their experience in the past. Sure, these hypotheticals may not be predictions for future returns, but if you are looking for policies with lower costs and the best performing fund, they can give you a good idea.
There are a lot of benefits that are attached to having an annuity. Many individuals choose this option because of all the advantages they receive. If you are wondering whether you should choose this option, look at the benefits below.
To begin with, with this option, you will receive flexibility. Along with flexibility, you will find different investment choices. There are sub-accounts that have different funds to pick from. You will be able to change the direction of the investment, without having to pay much.
Along like your IRA or 401k, the earnings and contributions could grow tax-deferred, until you decide it is time to take the funds. If the account if non-qualified, you will not be required to make withdrawals when you reach the age of 70.
Another benefit would be the fact that you will have income for life. No other investments will give you the option of having an income for life and this is a big reason why people enjoy this type of investment. Once you choose the monthly payments (or yearly), the company will guarantee you (and your family, if you choose), the payment for your entire life. If you think about it, when you choose this option, you will be creating your own pension.
Along with the benefits above, one cannot forget about asset protection. In various states, these investments are a major shelter away from creditors. If you work in a business that lawsuits tend to flock to or if you are in an accident, it is important that you protect those assets. These investments will work with you and give you the protection you need.
Variable annuities is a lovely retirement product, but you need to dive in and do some research before you make your decision. It pays off to compare investments and get the advice from a trained specialist before you buy the annuity.
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