As the human life span gets longer and as retiring in America gets more difficult than ever, a lot of people are more and more worried about outliving their income.
Luckily, you have the option to do something about it. Investing in annuity insurance is a good way to plan for the future and insure an income tailored to your lifestyle needs.
When purchasing annuity insurance, you can invest a lump sum, or make several payments during a period of time. Through annuitization, annuities insure a steady stream of payments for the number of years specified in the contract.
Fixed annuities are more secure and provide guaranteed, fixed payments that are specifically agreed upon in the contract. With fixed annuities, the insurance companies invest money in fixed-rate investments such as bonds.
Variable annuities are riskier and provide payouts that vary, depending on the performance of the investments. With variable annuities, the insurance companies invest money in stocks, bonds, mutual funds, money markets and more.
Indexed annuities are linked to a specific stock market index. Despite the performance of the specific stock market index, the payouts are usually no less than the amount specified in the contract.
Immediate annuities ensure payments almost immediately after the investment, which is usually made in a lump sum.
Deferred annuities have payments that are deferred for a period of time, usually upon retirement, allowing your investments to earn interest.