An Annuity is a contract with insurance companies. Annuitants (buyers) make a lump-sum payment and in exchange, the insurer agrees to pay them back either immediately or over time. The buyer can elect for immediate payments or deferred annuities that will start at an agreed-upon date in the future.
You may have heard of annuity life insurance policies that you can buy from your local bank or financial institution, but how exactly do they work? This policy is a contractual agreement between an individual (the policyholder) and an insurance company to provide regular income during retirement years when other sources of income dry up. Annuity policies differ from traditional investment products like mutual funds because they offer guaranteed returns which means there is little to no risk of losing your investment. Annuity life insurance policies can also be used as a tax-free way to save for retirement.
When you purchase an annuity policy, you will have two choices: immediate or deferred payments. An immediate annuity starts making payments right away, while a deferred policy begins payments at some future date that you agree upon when signing the contract. The biggest benefit of purchasing an annuity policy is the security it provides – knowing that you will have a steady stream of income during your Golden Years.
If you are interested in learning more about annuities and their various benefits, please contact our office today! We would be happy to answer any questions you may have and help get you on the right path to a secure retirement.
Annuity Policy Features
- Annuity life insurance policies provide security during your retirement years
- There are two types of payments: immediate and deferred
- Annuities offer guaranteed returns, which means there is little risk of losing your investment
- Annuities can also be used as a tax-free way to save for retirement
Annuity life insurance policies can be a great way to ensure a comfortable retirement, and we hope this article has helped you understand how they work. Please feel free to contact us if you have any further questions or would like more information on annuities and their benefits. Have a great day!