Your Annuity Explained
The concept of an annuity is often not fully understood, so we thought that we would include this article.
The word "annuity" was derived from a word in Latin "annus" which is an investment medium that's very akin to Certificate of Deposits that banks give.
In straight-forward language, annuity is the same as income. Annuity on a deeper definition is like a mortgage in which a person receives series of habitual payments in return for a premium or premiums he had paid. More people buy annuity for the purpose of future retirement.
But don't forget that an annuity isn't the same thing as a life insurance or a health insurance policy. Annuity is also not the same thing as a savings account and it can't pass for a savings certificate.
Anyone that's looking for a short term solution to financial problems shouldn't buy annuities. If you look at it positively however, annuities can go a very long way in helping anyone to build wealth that can be enjoyed in the future. There are several kinds of annuities no doubt, but the types that are common to many people are the variable and the fixed types of annuities.
When you hear the word "fixed annuity" this is the type of annuity whereby the premium of an individual earns him/her a minimum guaranteed interest rate. Variable annuities, on the other hand, refer to premium that can go up or down, depending on certain trends that one has no direct control on.
Anyone willing to buy annuities should ensure they get all the information that will help them before getting involved.
Lastly, it's pertinent therefore for you to find and talk to a trusted insurance agent before you go ahead to buy annuities.
Steve Symes also contribites to the Dog Lover's Compendium Breeds Articles site.
|
