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Structured Settlement Annuity – Investment for your Future

As an investor who would like to plan for retirement, you may have studied various options, and locked down your interest to annuities. You may be wondering, what is annuity, and the various types of annuities that are available for you to invest in. An annuity gives you the option of investing your money after signing a contract with an insurance company, and getting payments after an agreed period of time.

One of the types of annuities is a structured settlement annuity, and the individual who asked what is annuity, may want to lock down their interests to this type of annuity. This type of annuity is reached upon after a court settlement, and the plaintiff is paid for a specific period of time after a lawsuit. The defendant who lost is the one who purchases this type of annuity, especially if the payment is to be made over a long period of time, especially if the payments are supposed to be paid for a duration that may exceed the defendants life time.

An individual who wants to know what is annuity should know that this option is available only to individuals after a court of law has ruled that they should be paid a certain amount of money, usually for the rest of their life. This is usually after an injury, especially in the work environment where the plaintiff may have been injured to the extent that they may not be able to work again. The injured party is assured of income for the rest of their life as a result, and this income is meant to help them with their daily expenses, as well as medical expenses that may be as a result of the major injury.

The individual who asked what is annuity may want to know what the advantage of such a settlement is, and the answer is that, like any other annuity, such a settlement is exempt from tax during the accumulation phase, and payment is guaranteed for the number of years determined by the court.

The individual who wants to know what is annuity could be advised that such a settlement could be requested by the plaintiff through their lawyer during trial, as a compensation for major injuries, and when granted, the defendant will be required to purchase annuity for the aggrieved party from an insurance company.

This type of settlement could also be reached upon outside the law courts with the hope that the individual will drop the charges. A defendant could ask the plaintiff to settle outside court by committing themselves to paying the individual a certain amount of money for a certain period of time through an insurance company in the form of annuities.

There are a lot of documents that need signing in a structured settlement annuity, especially considering that it is a legally binding agreement that is usually issued by a court of law or its representatives. However, it is a good way to compensate individuals who may have lost their means of livelihood due to a serious injury, and who may be faced with extra expenses due to hospital bills.

Safeguard your Future with Indexed Annuity

Annuity for retirement can safeguard your future retirement plan when you locate a good insurance company that can offer you the best options. There are various annuity options to choose.  Indexed annuity is certainly one of them. There’s a lot you’ll benefit when you know more about   it.

In the past, there are only two basic options for annuity for retirement. They include Fixed and Variable annuities.  People have always gone for either of the two. However in the early 1990’s, indexed annuity was introduced as a third option.  Ever since then, it has continued to gain wide recognition as many people keep going for it.

ImmediateAnnuityBasically, indexed annuity as a form of annuity for retirement is designed to mirror the performance of a specified or common index. It involves the tracking of a popular index.  When this is done, the owner of the index annuity can easily participate in the general market change. He or she is also able to track the status of the   values of the annuity.

In most cases,  insurance companies offering  index annuities as part of  annuity for retirement  usually specify   the participation rate which is the  level at which the    index annuity owners will be allowed to be in the market.

Usually, the participation rates are quoted in percentages.  The insurance company involved usually mitigates the downside risk.  Oftentimes, many insurance companies that offer indexed annuity usually state that the annuity owners will not receive less than the cash they deposited originally irrespective of how the index performs.  Some of the companies may even go further to ensure that the value of the indexed annuity will always increase by a minimum annual interest rate.

In most cases, increases in indexed annuities come with a spread. This is the difference between the amount credited and the annuity funds earned.  The spread in indexed annuities normally reflect in the statement issued by the insurance company and in the initial contract signed.

As a kind annuity for retirement, indexed annuity is tax deferred. You don’t have to pay any dime of tax until you make   your withdrawal.  The annuity is meant for   supplying income during retirement, hence, it’s usually held for long term.

From the above, it’s very clear that indexed annuity is somehow too technical. You need to pay close attention when going for it. There are some features to consider when thinking of choosing such an annuity for retirement purposes.  You need to consider the strong ratings. Here, you check the kind of guarantee and assurance the insurance company offers.

Again, you also need to consider the spreads. Check whether they are flexible or fixed. You have to also check the participation rates involved and discover whether they are higher or lower.  In most cases, higher participation rates pay better.  You have to also check the surrender period and make sure it lasts no longer than 12 years.  You need to also check the withdrawal status.  Free withdrawals are the ideal.  The death benefits involved should also be considered. When you check out all these points, you’re sure to succeed in locating a good insurer that can give you the best of options in indexed annuity.

Guaranteed Income Annuity – Less Investment Risk

Many individuals, especially those who are soon to retire, would like an investment that will guarantee them a regular income even after they have stopped working. For such investors, the question, what is annuity, always pops up. Annuity is an investment tool in which the investor enters into an agreement with an insurance company to purchase the annuity with the promise of being paid after an agreed period. The purchase could be made in one single payment or in a series of payments, and after that, withdrawals will be made depending on the agreement between the investor and the company.

Retirees like the prospect of guaranteed income after retirement, because they were already used to regular income before retirement. Guaranteed income annuity does not involve any investment risk or the possibility of loss of money due to the poor performance of stock or shares. The investor will always get the guaranteed amount of money over the years, without any interest growth or any decline due to the performance of the market.

The investor who would like to know what is annuity should be glad to know that a guaranteed income annuity is very safe as the income that they receive is assured, and the amount is the same at all times. There is no risk whatsoever, as the insurance company will be required to pay them the agreed amount regardless of what goes on in the money markets.

The investor who inquired what is annuity should also be advised that this type of annuity is not flexible at all, and the investor cannot make any changes to the agreement. The income that you and the insurance company agreed to at the time when you were signing the contract is the one that you will get for the agreed period, even if the markets improve drastically and a lot of money is gained on your investment.

This can be quite disadvantageous, and the investor could end up losing in the end, especially if there is a significant change in the market. However, they could gain if this significant change is negative, as they will still get the agreed income every time.

The investor inquiring what is annuity should therefore consider carefully before choosing such an annuity, and they should seek professional help before making such a decision. Guaranteed income annuity has a serious disadvantage, but it also has a serious advantage in that a retiree’s pension is converted into regular income, which they use just as they did before they retired. Therefore, the individual is guaranteed a salary for the rest of their life and this assures them financial safety in the end. It is also the best type of annuity for individuals who are not seeking any profits on their investment or who are not willing to take any risks with their money. Pension can easily be converted into a guaranteed income annuity and the investor will be able to enjoy the rest of their life after retirement without constantly monitoring the money markets and without any fear of loss or reduced income in later years.

Weighing the Difference between Fixed Annuity and Variable Annuity

Annuities are contracts normally issued by the insurance companies. They provide an individual person with a means of income. To receive the payments; you have to pay some lump sum amount of money to the insurance company. You will be paid out in periodic installments and where the payments starts immediately, it is referred to as the immediate annuity. It is a promise that insurance makes that it will offer periodic payments for a certain time to the purchaser of the annuity. They are sold as insurance products making them have the insurance like features.

In differed annuities, payments begin at a certain date in the future e.g at age 65 or 67 to be parallel with retirement. It gives the annuitant more payment. Periodic investments are made by the investors to build a large sum and after the buildup, payment begin. In simple terms differed annuities involves making periodic investments in order to have large sums and once the large sums are made, payments then begin. The fixed annuity and the variable annuity are a type of deferred annuity and in this article, we will try to differentiate them.

I know you are asking yourself about the difference between variable annuity and fixed annuity. Payments in the case of fixed annuity are fixed while in variable annuity it is dependent on investment performance that a certain annuity has. Fixed annuity is nearly the same as the defined benefit pension plan like social security while the variable annuities are nearly similar to the defined pension plan.

Fixed annuities are less risky while the variable annuities are very risky. If one is looking for a safer way of investing when it comes to annuities, then the fixed annuity is the best choice. A fixed annuity ensures that you have a guaranteed return at the end of every month. You are assured of a steady income with fixed annuities than in the case of variable annuities. What makes variable annuities risky is the fact that their investment portfolio usually is not stable.

They fluctuate with the market and it is difficult for one to have guaranteed monthly rates of return. One month you could be making a lot of money the next you could be making a lesser amount of money. You will only benefit from variable annuities only if your returns are high.  With variable annuities, you are not guaranteed. Stabilized income from investments is usually experienced with the fixed annuities and people who are in the work force and about to retire usually prefer them. This is because they offer one with an income on a regular interval.

A key feature for variable annuities is the separate accounts, which are usually separate from the general account for the insurance company. The gains, interests, losses and dividends are separate except the insurance company’s finances. Securities are held in a pooled form and that is why we have a separate account, which makes it similar to the mutual funds. In fixed annuity we have the general account.

Deferred Annuity – Investing for a Secured Future

Many insurance companies offer various investment options, and one of them is an annuity. Therefore, a typical day for an insurance agent may include a question such as what is annuity for an investor. The simple, clear answer is that it is a type of investment vehicle in which the investor enters into an agreement with the insurance company to pay a certain amount of money after which they will receive payments for certain duration of time, either immediately or after a certain amount of time.

You may also note that the investment may experience growth, and that there are not taxes until the investor starts withdrawing, after which the eyes of the investor who asked what is annuity will become brighter and wider as they ask to know more about this lucrative option. This option is known as a deferred annuity, and in this type of annuity, the investor pays either a lump sum or a series of payments to an insurance company and they agree to be paid after a certain period.

A deferred annuity is the best way to save your money so that you can use it in the future, and the individual could end up making a lot of money from this type of investment. At the end of the investment period, the investor could choose to withdraw some of the funds on a regular basis, or to receive all the money at a go.

In addition, the funds in a deferred annuity do not pay any tax during the accumulation stage, and one only starts paying income tax after they start withdrawing money from this annuity. This already sounds too good to be true, and the individual who asked what is annuity may be wondering whether there is a downside to this type of annuity.

In truth, there is always a downside to everything, and the disadvantage of this type of annuity is that the individual does not have the luxury of withdrawing the money before the agreed date. If they have to withdraw the money before the time has passed, they will be charged penalty fees, which will go on decreasing until the agreed amount of time lapses, after which the surrender charges will no longer apply. These fees vary from one company to another, and it is important for the potential investor to read the terms of a particular company before choosing to invest with them.

The individual who inquired what is annuity should also be informed that in a deferred annuity, they have the option of choosing between fixed annuities and variable annuities. In a fixed annuity, the rate of growth is fixed, while in a variable annuity, returns are dependent on the performance of subaccounts.

A deferred annuity is a great way for an investor to plan for years after retirement, the returns can be quite substantial, and the investor and insurance company can enter into an agreement so that the investor receives payments for the rest of their life. With such an explanation, the investor will definitely be sold.

Using Annuities for Retirement Protection Plans

Since the financial crises of a few years ago, most United States citizens have become wary of financial investments and are constantly on the lookout for products that can only guarantee specific amounts of return. Annuities for retirement or other purposes remain one of the few types of investments that offer guaranteed rates of return in addition to being tax-free. They have also competed favorably with traditional retirement plans and have even replaced them in some situations.

In simple terms, an annuity plan is whereby you invest lump sums or periodic payments of principal with an insurance company. Over the years, your principal amount grows at a fixed rate a variable rate in line with market trends, depending on the type of annuity plan you agree upon. The most common types of annuities are the fixed and variable annuities. Even after you begin to make withdrawals from your annuity plan years later, you will continue to earn interest on the total amount that remains with the insurance company.

Benefits of Annuities as Retirement Plans

Annuities have become very attractive as retirement protection plans due to its tax-free nature and a number of other attached benefits. Top on the list of these benefits is the fact that annuities offer a guaranteed rate of return and can provide steady income for retirees over the remainder of their lifetime. Most investors have gotten their fingers burnt by placing their funds in market driven stocks and bonds. With annuities, there are no such surprises. Also, there are no restrictions to investible amounts for annuities. So, retirees can lump all their retirement benefits, individual savings and even inheritances into annuity plans, which will generate large streams of income in later year.

The tax benefit of annuities is also very superb as the total amount invested is free from any tax liability. Even at the point of withdrawal, it is only the income earned on the principal that can be subjected to tax, while the actual principal remains intact. A combination of all these benefits has made annuities low risk investment highly admired b y retirees and even the younger folk.

Additionally, there is a specific type of annuity that even allows you to make withdrawals in as little as one month after investing you lump sum. This type of annuity is referred to as an immediate annuity. Generally, there are different types of annuity plan that meets the need of all segments of society. You can decide which annuity for retirement plan best suits your needs by using our annuity comparison and calculator tools.

To get started, enter your zip code on the top of this page, and then answer some basic questions. This will help you to compare annuity plans from multiple providers for FREE to determine your highest eligible rate. It is important to provide accurate questions to these answers as our pool of providers will provide you with different rates depending on your individual circumstance and situation.

Useful Info about Annuity for Retirement

Annuity for retirement simply refers to a unique insurance policy that pays out a certain amount of income   for retirement purposes.  It’s   one of the best investments you can make in order to ensure steady supply of income when you retire from active service.

Annuity for retirement does not work in isolation. There are necessary steps you must take in order to actualize it.   You begin by making a certain amount of investment in the annuity. This will then make payments to your account on future series of dates.  The money you make in the process can be paid to you on monthly basis. It can also be paid on quarterly or annual basis in order to secure you retirement period.

When it comes to annuity for retirement, the size of the payment you receive is determined by certain factors.  The same thing applies to the length of the payment period.  It’s possible to decide to receive the payments for some years or for the entire period of your life.  The amount of money you’ll receive is highly dependent on the kind of annuity you choose.

Before you decide to go for annuity for retirement, it’s important you make wide consultations. Sure, you can gain a lot from the policy if you know how best to go about it.  However, you may even mess things up especially if you’re the type that spends money as you wish.  It’s important you know a lot about annuity and what are the necessary demands involved in order to gain more from it.

Basically, annuity is of two types namely immediate and deferred annuities.  If you opt for deferred annuity, the money you drop down is invested for a certain period of time until you’re ready to start making withdrawals from it when you retire.  On the other hand, immediate annuity allows you to start receiving payments after you make the very first investment even before you retire.  This means that, immediate annuity pays out quickly while deferred annuity allows the money to accumulate.  It’s your duty to choose the right option that can suit your purpose.

Apart from the two basic types of annuity described above, annuity can equally be categorized into two forms namely, fixed and variable annuities.  These options depend on the kind of investment option you choose.  Each category comes with its pros and cons.

The Pros of Annuities

The major advantage of annuities of whatever type is that they can help you to save enough money for your retirement. They also help in deferring the payment of taxes.  The saved money will also be working for you in one way or the other. If for any reason, your run out of cash, you can decide to withdraw some cash from your investment.  Annuity for retirement also compliments other sources of retirement incomes like pension plan and social security. You’ll always secure your retirement through such sources.

The Cons

There may be some hidden fees in some annuity plans. You need to be very careful with the insurance company you’re dealing with. There may also be commission charges, surrender charges, annual fees, and so on. However, these are limited to the insurance company you’re dealing with. You have to make proper inquiries before choosing any of the insurance companies that offer annuities.

In all, annuity for retirement is a wise investment to engage in. you can secure your future retirement properly when you engage it. You’ll get better results when you locate a reliable insurance company that offers the best annuity plans.

Tips for Using Annuities for Retirement Income

Most people are looking forward to a secure future, especially in retirement, as more people desire of maintaining a secure and healthy lifestyles even as retirees. Annuities for retirement income may serve as a great way to achieve this dream and this article will offer you great tips on how to achieve this.

Starting out With Annuities

The first thing you need to do when considering annuities as a vehicle for retirement income is to gain a very good understanding of the different types of annuity available in order to choose the option that best suits your needs. Annuity types can range from fixed to variable and a number of other specialized options. Also, it is important to start investing as early as possible in order for you to be able to enjoy larger payouts during the retirement period. In addition, a larger principal gives you the advantage to receive reasonable amounts of income for the rest of your life.

After having a good understanding of the different options available, you still need to decide on the best annuity provider to invest your funds with. There are quite a lot of insurance companies that offer annuity plans, but you will need to compare prevailing interest rates offered and speak with current users in order to make the best decision. Remember that other retirees whom have had contact with the providers can give you first-hand experience of the performance of several annuity plan providers.

Furthermore, you should as much as possible take advantage of the flexible nature of annuities and build your actual needs into the kind of contract you sign. For instance, if you wish to invest your bulk cash and still receive payments within a short time, then you may decide to settle for immediate annuities. Alternatively, you can include a clause that allows your annuity balance to be paid off to your family members if you die within a short period. This way, you have an annuity plan, which also serves as a kind of inheritance for the loved ones you may leave behind.

Additionally, ensure that you read between the lines for all contracts before putting pen to paper, in order to get the maximum benefit from your annuity plan. Never rely fully on the words of annuity plan marketers. If you can afford it, bring in a legal expert who will help you to identify any unfavorable clause included in the contract.

In conclusion, we wish to restate that annuities for retirement currently serve as one of the most guaranteed forms of income, while offering great tax benefits and immune to fluctuations in the stocks and bond market.

To get started, enter your zip code on the top of this page, and then answer some basic questions. This will help you to compare annuity plans from multiple providers for FREE to determine your highest eligible rate. It is important to provide accurate questions to these answers as our pool of providers will provide you with different rates depending on your individual circumstance and situation.

Why Choose Index Funds in your Retirement Planning

When people think about retirement what comes to mind are the high costs that this entails. For many people, finding the right investment for their retirement funds is a very difficult thing to do. This is because there are many investment options that are available but either give too little investment returns or are too expensive for many people to afford. Thus many people choose just to save their money and hope for the best. This type of thinking is very dangerous as many people do not realize that retirement is for life. And savings can only go a long way in providing a steady income; they cannot last more than 10 years without being combined with investment options such as index funds or even mutual funds.

RetirementInvestmentAnd while it is a good idea to ask investment companies about what kind of investments can best suite your needs, it is very important for you to also research widely about these investments by yourself as companies too have their own agendas; like selling you investments that have high costs in terms of purchasing as well as commissions. And in your research, you may find out that one investment options that you could consider choosing for yourself and your family is index funds.

Index funds are investments that allow you to put your savings in a group of stocks which are offered by companies. This type of investment maybe viable as it may allow you to make money at a very fast pace, risk free and at a low cost. And the best thing about mutual funds is the fact that they may provide a lot of profits for all those who invest in them and thus making it an option that you could consider investing in.

With index funds, you could also get low tax cuts as well as commissions. This means that you can easily enjoy your retirement life while your income keeps on increasing with time. Moreover, this is a big difference to all other forms of investment options, as they always require you to either pay different rates of commissions or purchase when you access.

Simply enter your zip on the top of this page, followed by some basic information and compare annuity quotes.

Selling Your Annuity for Retirement Plan

Are you aware that you can sell off your annuity for retirement plan and use the bulk some as you wish? We have placed in this article great tips that can help you with getting the best deal if you ever decide to sell off your annuity plan.

An annuity is a product from an insurance company in which you invest a lump sum so that you can receive regular payments in future. There are different types of annuities. An annuity can be single-premium or flexible-premium annuities, immediate or deferred-payment annuities, qualified or non-qualified annuities and fixed-interest, indexed, or variable deferred annuities.

The major reason people buy annuities is to prepare for retirement when you are no longer working so that you can have a stream of income to rely on, or have something tangible to pass on to your children.

However, due to unforeseen circumstances, an annuitant may decide to sell his annuity along to line, opting to receive a lump sum now instead of waiting to receive regular payments over a period of time. Some people may opt to sell their annuity so as to enable them clear a huge dept, buy a house, or make an investment. It is often best not to sell your annuity because the original reason for buying it in the first place was to have a dependable source of income after retirement. Also, the lump sum you would receive from selling your annuity would be lower than the total value of the annuity to be received throughout the duration of the annuity.

However, if you must sell your annuity, there are a few helpful tips to consider. Primarily, talking to your insurance company about your decision is a good place to start. That way you can see what options you have and be able to make a quality and well-informed decision.

Choosing the right company to help you sell your annuity is of extreme importance. This is because the procedure may be a little complex and cannot be carried out without support. Be on the lookout for different companies so you can get different bargains and be able to choose the one that is best for you Also, it may be a good idea to only sell a part or fraction of your annuity instead of selling the whole annuity. It is also very important to shop for the best buyer.

Do some research on the available annuity buyers and ensure you sell to a very reputable company. To sell your annuity, you need to provide the purchaser with some vital information such as when the annuity was purchased, the type and current value of annuity, and the name of the company presently holding the annuity. Getting good tax advice is also very important because selling you annuity may have tax implications.

Simply enter your zip on the top of this page, followed by some basic information to receive FREE quotes and compare annuity rates!