Life insurance protects your family from debt in the untimely event of your passing. Annuity products are retirement vehicles that provide a sound, safe and less volatile outcome than what stock markets have shown.
Life Insurance
Most hope they will be able to see their children reach adulthood, but it isn’t always the case. Sometimes, the main breadwinner of the family passes away prematurely. If this were to occur, the family would see a significant reduction in their finance and likely left with some form of debt be it a mortgage payment, college tuition etc. For this reason, life insurance was invented to protect your family from debt.
How Can Life Insurance Be Used?
A life insurance policy is coverage that can replace the main breadwinner’s salary until the youngest child has reached the age of majority. This would allow the family to remain in their home because they will be able to continue to make the mortgage payments. They will be able to maintain the lifestyle that they are currently accustomed to living because the life insurance will help them pay all of their bills.
The death benefits from a life insurance policy can also be used to fund the children’s college educations. The surviving spouse would need a retirement fund, and life insurance can go toward this purpose. Life insurance can also take care of the immediate needs after the policyholder passes away, such as any remaining hospital or medical bills and the funeral and burial expenses.
What Types of Life Insurance Are There?
Those who do not have a lot of money to contribute toward life insurance can opt to purchase a term policy. Term life insurance is strictly a life insurance policy that remains active for a pre-determined number of years. For example, if a couple’s youngest child will turn 18 within 10 years, they can purchase a joint life insurance policy that will insure their lives for just that amount of time.
Some people are harder to insure because they have pre-existing medical conditions, but this does not mean that they will not be able to purchase a life insurance policy. Some insurance companies offer “no-exam” policies that do not require that they take a medical examination in order to qualify for coverage.
People can also purchase a life insurance policy that will remain in effect for their entire lives. These insurance policies are called “permanent life insurance” policies, and they also have a cash value that increases as time goes by. The premiums that people pay to keep the policy active also go toward an investment portfolio that adds to the cash value.
Those who would like predictability in their life insurance premiums and cash value may opt to purchase a whole life insurance policy. If they prefer to have flexibility in their premiums, cash value and death benefits, a universal policy may suit their needs.
Payment of Premiums and Death Benefits
Life insurance policies are rather straightforward. Insurance companies determine how likely their applicants are to pass away while their policies are active, and they decide how much they will charge these policyholders every month in what are called “premiums.” As long as the policyholders pay their premiums every month, their beneficiaries will receive the death benefits after they pass away.
An annuity is a form of income that is paid to a person in predetermined increments. Many people buy annuities for various reasons such as retirement savings, in case an emergency situation leaves you unable to work or even if you just need money to help get by. Most annuities are paid out for the rest of the investor’s life, but certain types of annuities can pay for other amounts of time. However, you will need to know about the different kinds of annuities before you decide to invest in one. Here are all of the different kinds of annuities to help you decide which one is best for you.
Fixed Annuities
Fixed annuities are those where you pay either a lump sum of cash or pay smaller amounts in increments in order to get a guaranteed interest back for however long your contract states. These annuities are usually investments in government facilities or large corporations in order to maintain their guarantee of a return investment.
There are two types of fixed annuity. First there is the GRA or guaranteed return annuity. A GRA guarantees that you will always receive 100 percent of your investment and will not be charged should you choose to drop out of the investment early on for whatever reason.
The other fixed annuity is the MVA or the market value adjustment annuity. This annuity holds a higher risk due to the fact that it does not guarantee that you will get back 100 percent of your investment nor does it guarantee that there will be no charges if you choose to bail out on the contract early on. However, due to the increased risk with MVA, they usually pay out more than a GRA.
Variable Annuities
Variable annuities allow the investor to select from a variety of different investments called sub-accounts and choose which ones they’d like to invest in. Your returns are then based off of how much you invest and how well the sub-accounts do in the market. This makes it drastically different than fixed annuities which provide guaranteed returns on your investments. A nice aspect of variable annuities, however, is the ability to freely change what you are investing in with no penalties to you. If you ever invest in something that you feel won’t work out, you can choose a different sub-account and try that instead.
Variable annuities allow for potential growth in your investment unlike fixed annuities. If your investments turn out to be good choices, you could see a lot more money in your returns than with a fixed annuity.
Indexed Annuities
Indexed annuities are quite similar to fixed annuities. You gain them through insurance agents and the investor can select their own interest rates, however, unlike fixed annuities, indexed annuities put their investments in indexes such as the S&P 500. The returns and interest rates depend on the current states of those indexes. Indexed annuities also differ from fixed annuities in that they require a fee if you choose to drop the investment.
Indexed annuities also differ from fixed annuities in that they require a fee if you choose to drop the investment. Indexed annuities are almost always for future savings such as retirement funds and are not for people who are looking for a short term investment.
Immediate Annuities
Immediate annuities are annuities in which the investor gets payments immediately and automatically. This differentiates immediate annuities from the others since most of the other annuities are for savings and are usually paid out at a later date. Immediate annuities are good for people who require a form of income as soon as possible. Perhaps some people who have been injured or people who are elderly and never got a good retirement plan or maybe just people who aren’t making enough on a daily basis. Whatever the reason, immediate annuities can continue to give you money for a few years, the rest of your life and even the rest of your spouse’s life. A nice feature of this annuity is that you can choose between a fixed plan and a variable plan.
Deferred Annuities
Deferred annuities are the most popular type of annuity. Like immediate annuities, deferred annuities can also be fixed or variable types. However, deferred annuities are typically for people planning for retirement, like indexed annuities. Deferred annuities have a fixed time frame, such as the start of retirement, when they start receiving payments. You don’t have to wait years to get some money from it, however. You can get as much as ten percent a year after about a month after purchase.
Deferred annuities are very preferable for retirement plans because they always grow with you. The longer you have one without withdrawing money, the more money that builds up. There is a big risk associated with this annuity, however. If the investor dies before payments start, the investor’s family receives nothing.
Figuring out which annuity is right for you may be confusing, but it really depends on your situation, plans and what kinds of risks you’re willing to take for potentially better returns. Fixed annuities are great for people looking to save up some money for the future with little to no risk involved with their money. Variable annuities are a good choice for those looking to play the market a bit for a better return. Indexed annuities may be good for people who are looking to take a bit of a risk for a better return. Immediate annuities are obviously better for people who need financial help now and have some money set aside to invest. Finally, deferred annuities are great for those looking to save for retirement, but shouldn’t be left as a plan for your family in case you die before the payments come.
Once you have figured out what you’d like to invest in, contact an insurance agent to get your annuity started.
How Can Life Insurance Be Used?
A life insurance policy is coverage that can replace the main breadwinner’s salary until the youngest child has reached the age of majority. This would allow the family to remain in their home because they will be able to continue to make the mortgage payments. They will be able to maintain the lifestyle that they are currently accustomed to living because the life insurance will help them pay all of their bills.
The death benefits from a life insurance policy can also be used to fund the children’s college educations. The surviving spouse would need a retirement fund, and life insurance can go toward this purpose. Life insurance can also take care of the immediate needs after the policyholder passes away, such as any remaining hospital or medical bills and the funeral and burial expenses.
What Types of Life Insurance Are There?
Those who do not have a lot of money to contribute toward life insurance can opt to purchase a term policy. Term life insurance is strictly a life insurance policy that remains active for a pre-determined number of years. For example, if a couple’s youngest child will turn 18 within 10 years, they can purchase a joint life insurance policy that will insure their lives for just that amount of time.
Some people are harder to insure because they have pre-existing medical conditions, but this does not mean that they will not be able to purchase a life insurance policy. Some insurance companies offer “no-exam” policies that do not require that they take a medical examination in order to qualify for coverage.
People can also purchase a life insurance policy that will remain in effect for their entire lives. These insurance policies are called “permanent life insurance” policies, and they also have a cash value that increases as time goes by. The premiums that people pay to keep the policy active also go toward an investment portfolio that adds to the cash value.
Those who would like predictability in their life insurance premiums and cash value may opt to purchase a whole life insurance policy. If they prefer to have flexibility in their premiums, cash value and death benefits, a universal policy may suit their needs.
Payment of Premiums and Death Benefits
Life insurance policies are rather straightforward. Insurance companies determine how likely their applicants are to pass away while their policies are active, and they decide how much they will charge these policyholders every month in what are called “premiums.” As long as the policyholders pay their premiums every month, their beneficiaries will receive the death benefits after they pass away.
Annuities
An annuity is a form of income that is paid to a person in predetermined increments. Many people buy annuities for various reasons such as retirement savings, in case an emergency situation leaves you unable to work or even if you just need money to help get by. Most annuities are paid out for the rest of the investor’s life, but certain types of annuities can pay for other amounts of time. However, you will need to know about the different kinds of annuities before you decide to invest in one. Here are all of the different kinds of annuities to help you decide which one is best for you.
Fixed Annuities
Fixed annuities are those where you pay either a lump sum of cash or pay smaller amounts in increments in order to get a guaranteed interest back for however long your contract states. These annuities are usually investments in government facilities or large corporations in order to maintain their guarantee of a return investment.
There are two types of fixed annuity. First there is the GRA or guaranteed return annuity. A GRA guarantees that you will always receive 100 percent of your investment and will not be charged should you choose to drop out of the investment early on for whatever reason.
The other fixed annuity is the MVA or the market value adjustment annuity. This annuity holds a higher risk due to the fact that it does not guarantee that you will get back 100 percent of your investment nor does it guarantee that there will be no charges if you choose to bail out on the contract early on. However, due to the increased risk with MVA, they usually pay out more than a GRA.
Variable Annuities
Variable annuities allow the investor to select from a variety of different investments called sub-accounts and choose which ones they’d like to invest in. Your returns are then based off of how much you invest and how well the sub-accounts do in the market. This makes it drastically different than fixed annuities which provide guaranteed returns on your investments. A nice aspect of variable annuities, however, is the ability to freely change what you are investing in with no penalties to you. If you ever invest in something that you feel won’t work out, you can choose a different sub-account and try that instead.
Variable annuities allow for potential growth in your investment unlike fixed annuities. If your investments turn out to be good choices, you could see a lot more money in your returns than with a fixed annuity.
Indexed Annuities
Indexed annuities are quite similar to fixed annuities. You gain them through insurance agents and the investor can select their own interest rates, however, unlike fixed annuities, indexed annuities put their investments in indexes such as the S&P 500. The returns and interest rates depend on the current states of those indexes. Indexed annuities also differ from fixed annuities in that they require a fee if you choose to drop the investment.
Indexed annuities also differ from fixed annuities in that they require a fee if you choose to drop the investment. Indexed annuities are almost always for future savings such as retirement funds and are not for people who are looking for a short term investment.
Immediate Annuities
Immediate annuities are annuities in which the investor gets payments immediately and automatically. This differentiates immediate annuities from the others since most of the other annuities are for savings and are usually paid out at a later date. Immediate annuities are good for people who require a form of income as soon as possible. Perhaps some people who have been injured or people who are elderly and never got a good retirement plan or maybe just people who aren’t making enough on a daily basis. Whatever the reason, immediate annuities can continue to give you money for a few years, the rest of your life and even the rest of your spouse’s life. A nice feature of this annuity is that you can choose between a fixed plan and a variable plan.
Deferred Annuities
Deferred annuities are the most popular type of annuity. Like immediate annuities, deferred annuities can also be fixed or variable types. However, deferred annuities are typically for people planning for retirement, like indexed annuities. Deferred annuities have a fixed time frame, such as the start of retirement, when they start receiving payments. You don’t have to wait years to get some money from it, however. You can get as much as ten percent a year after about a month after purchase.
Deferred annuities are very preferable for retirement plans because they always grow with you. The longer you have one without withdrawing money, the more money that builds up. There is a big risk associated with this annuity, however. If the investor dies before payments start, the investor’s family receives nothing.
Figuring out which annuity is right for you may be confusing, but it really depends on your situation, plans and what kinds of risks you’re willing to take for potentially better returns. Fixed annuities are great for people looking to save up some money for the future with little to no risk involved with their money. Variable annuities are a good choice for those looking to play the market a bit for a better return. Indexed annuities may be good for people who are looking to take a bit of a risk for a better return. Immediate annuities are obviously better for people who need financial help now and have some money set aside to invest. Finally, deferred annuities are great for those looking to save for retirement, but shouldn’t be left as a plan for your family in case you die before the payments come.
Once you have figured out what you’d like to invest in, contact an insurance agent to get your annuity started.