Term Life Insurance No Medical Exam
Term Life Insurance No Medical
----------Before You Purchase An Annuity - Vital Information To Know
by Keith Dennis
If you are thinking of purchasing an annuity, read this first.
Purchasing an annuity is a major financial commitment much like buying a house. You might have your annuity longer than your house! As long as you understand the fine print and the annuity is a great fit it can be one of the smartest financial decisions you could possibly make! I am pro annuities for the right situation! Just be sure to understand what you are purchasing.
When you purchase an annuity there are certain considerations to keep in mind. Be sure to:
1. Study the surrender charge schedule. Surrender charges can be for as long as 15 years in some cases and can be very expensive. Purchase an annuity that matches your schedule so that money will be free when you need it. Otherwise you may see major fees when you need money the most.
2. Learn and study your investment time horizon. When will you need money from the annuity and how much will you need? Annuities purchases are long term investing.
3. Check the rating of the insurance company before purchasing an annuity. If a higher rated company is offering an almost identical product then choose the company with the highest rating.
4. Understand why you are purchasing an annuity. Is it for safety? Is it for income? Is it for growth? Is it for security? Is it for tax deferral? Is it for a guaranteed income stream? Is it for other guarantees? And does it really fit into your investment plan? Are you using the annuity in place of fixed income investments or as a growth investment?
5. Thoroughly understand the differences between a fixed and variable annuity. A fixed annuity cannot decrease in value but a variable annuity can decrease with the stock market. They both have certain guarantees so be sure to understand what you are purchasing. Can it go down in value? Why do you need to purchase an annuity that has the ability to lose money in uncertain economic conditions?
6. Understand how this annuity is going to affect your taxes when you take money out. Annuities are taxed differently than other investments and be harsher or even better in some cases. Is your annuity held in an IRA? Also, if you are passing this annuity down to heirs then why are you purchasing an annuity instead of life insurance that would likely pass tax free? If you are passing the money to heirs and that is the only purpose then single premium life insurance may be a whole lot better if it is possible obtain.
For purchasing a variable annuity:
1. Ask this question - Why are you purchasing a variable annuity that can go down in value? It is not about how great the past performance has been. The sub accounts/investment options rarely ever always perform the best. You need to have a reason to purchase an annuity. Once you have it you are struck with it for some time so be sure it is right for you.
2. Variable annuities can go down. They can be down when you need to take money out. That would mean you would have less money working to recover from the downturn and taking money out would be a bad idea. If that could be a problem then do not invest in variable annuities.
If you are looking at purchasing a fixed annuity:
1. The surrender charges are usually higher on fixed annuities than other types. Be sure that if you need any of this money there will be enough, with no charges, available at the right time.
2. Fixed annuities have amazing guarantees. Before you purchase an annuity because of one of these guarantees just be sure to understand it completely. How you take money out is the main thing to look for at first. Then compare the guarantee with other annuities and their guarantees. Some are better than others and might fit your situation a little better.
One last absolutely vital thing to check is the dollar amount of your states guarantees. Run a Google search for (your state) insurance guarantee. This is how I found my state's guarantee. Do not go over that amount with a single insurance company ever.
When you purchase an annuity be certain to get all of these questions answered. Most importantly, do not be rushed or pushed into making any decisions. There is no reason to rush through the decision making process with such a long term commitment like purchasing an annuity.
Purchasing an annuity is a major financial commitment much like buying a house. You might have your annuity longer than your house! As long as you understand the fine print and the annuity is a great fit it can be one of the smartest financial decisions you could possibly make! I am pro annuities for the right situation! Just be sure to understand what you are purchasing.
When you purchase an annuity there are certain considerations to keep in mind. Be sure to:
1. Study the surrender charge schedule. Surrender charges can be for as long as 15 years in some cases and can be very expensive. Purchase an annuity that matches your schedule so that money will be free when you need it. Otherwise you may see major fees when you need money the most.
2. Learn and study your investment time horizon. When will you need money from the annuity and how much will you need? Annuities purchases are long term investing.
3. Check the rating of the insurance company before purchasing an annuity. If a higher rated company is offering an almost identical product then choose the company with the highest rating.
4. Understand why you are purchasing an annuity. Is it for safety? Is it for income? Is it for growth? Is it for security? Is it for tax deferral? Is it for a guaranteed income stream? Is it for other guarantees? And does it really fit into your investment plan? Are you using the annuity in place of fixed income investments or as a growth investment?
5. Thoroughly understand the differences between a fixed and variable annuity. A fixed annuity cannot decrease in value but a variable annuity can decrease with the stock market. They both have certain guarantees so be sure to understand what you are purchasing. Can it go down in value? Why do you need to purchase an annuity that has the ability to lose money in uncertain economic conditions?
6. Understand how this annuity is going to affect your taxes when you take money out. Annuities are taxed differently than other investments and be harsher or even better in some cases. Is your annuity held in an IRA? Also, if you are passing this annuity down to heirs then why are you purchasing an annuity instead of life insurance that would likely pass tax free? If you are passing the money to heirs and that is the only purpose then single premium life insurance may be a whole lot better if it is possible obtain.
For purchasing a variable annuity:
1. Ask this question - Why are you purchasing a variable annuity that can go down in value? It is not about how great the past performance has been. The sub accounts/investment options rarely ever always perform the best. You need to have a reason to purchase an annuity. Once you have it you are struck with it for some time so be sure it is right for you.
2. Variable annuities can go down. They can be down when you need to take money out. That would mean you would have less money working to recover from the downturn and taking money out would be a bad idea. If that could be a problem then do not invest in variable annuities.
If you are looking at purchasing a fixed annuity:
1. The surrender charges are usually higher on fixed annuities than other types. Be sure that if you need any of this money there will be enough, with no charges, available at the right time.
2. Fixed annuities have amazing guarantees. Before you purchase an annuity because of one of these guarantees just be sure to understand it completely. How you take money out is the main thing to look for at first. Then compare the guarantee with other annuities and their guarantees. Some are better than others and might fit your situation a little better.
One last absolutely vital thing to check is the dollar amount of your states guarantees. Run a Google search for (your state) insurance guarantee. This is how I found my state's guarantee. Do not go over that amount with a single insurance company ever.
When you purchase an annuity be certain to get all of these questions answered. Most importantly, do not be rushed or pushed into making any decisions. There is no reason to rush through the decision making process with such a long term commitment like purchasing an annuity.
About the Author:
For step by step help on how to purchase an annuity visitKeith's Annuity Help Now website or sign up for his 7 Free Annuity Tutorials that teach exactly how to set up your retirement accounts to never go down again while filling up your pockets with the cash you need for retirement.
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