Term Life Insurance No Medical Exam
Term Life Insurance No Medical
---------------------How to Purchase An Annuity - Read This Now
by Keith Dennis
Before purchasing an annuity, read this.
A new annuity purchase is a lot like buying a house. It is a major financial commitment. You might own your annuity longer than your house! Imagine that! As long as you understand the minute details and the annuity is a perfect fit it can be one of the most astute financial decisions you could possibly make. I am pro annuities for the right financial situation! Just make sure you understand what you are purchasing.
When you purchase an annuity 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. Know your time horizon for investing. When do you need money out of the annuity? How much will you need? Annuities that you purchase are meant for long term investing.
3. Check the insurance companies rating before purchasing an annuity. If a higher rated insurance company is offering an annuity that is basically the same then choose the company with the highest rating.
4. Be sure to know why you are purchasing an annuity. Is it for safety, income, growth, security, tax deferral, a guaranteed income stream, or to reduce your social security taxes? Is it for other guarantees? Does it really fit into your financial plan? Are you using the annuity in place of other fixed income investments or as a growth investment? Why the annuity versus other investments? Do you understand why it is the right investment?
5. Understand the differences between a fixed and variable annuity. A fixed annuity cannot go down in value. A variable annuity can go down with the stock market. They can both have certain guarantees so be sure to understand what you are getting. Can it go down in value? Why do you need to purchase an annuity that can lose value?
6. Learn about how this annuity is going to affect your taxes when you take money out. Annuities are taxed a little differently than other investments. Is your annuity in an IRA? How does that affect your taxes? Also, if you are passing this annuity down to heirs then why are you purchasing an annuity?
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. Before you purchase an annuity be sure that you can afford to have your investments down when you need the money. That could be very bad for income generating purposes. If you think that may be a problem then do not purchase variable annuities.
For purchasing a fixed annuity:
1. Check the surrender charges again. They are usually higher on fixed annuities than any other kind of annuity. Be sure that when you need money it will be available with no charges.
2. Fixed annuities have amazing guarantee options. If you want one of these guarantees be sure to understand it entirely. What happens when you take money out? Look for the penalties not the process of taking money out. You can also compare options with other companies. There are so many now, some other insurance company could have a better option to fit your situation.
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.
Be certain to get all of these questions answered when you purchase an annuity. Most importantly, do not be pressured or pushed into making any decisions. There is no reason at all to rush through the decision making process with such a long term investment and such a big decision like purchasing an annuity.
A new annuity purchase is a lot like buying a house. It is a major financial commitment. You might own your annuity longer than your house! Imagine that! As long as you understand the minute details and the annuity is a perfect fit it can be one of the most astute financial decisions you could possibly make. I am pro annuities for the right financial situation! Just make sure you understand what you are purchasing.
When you purchase an annuity 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. Know your time horizon for investing. When do you need money out of the annuity? How much will you need? Annuities that you purchase are meant for long term investing.
3. Check the insurance companies rating before purchasing an annuity. If a higher rated insurance company is offering an annuity that is basically the same then choose the company with the highest rating.
4. Be sure to know why you are purchasing an annuity. Is it for safety, income, growth, security, tax deferral, a guaranteed income stream, or to reduce your social security taxes? Is it for other guarantees? Does it really fit into your financial plan? Are you using the annuity in place of other fixed income investments or as a growth investment? Why the annuity versus other investments? Do you understand why it is the right investment?
5. Understand the differences between a fixed and variable annuity. A fixed annuity cannot go down in value. A variable annuity can go down with the stock market. They can both have certain guarantees so be sure to understand what you are getting. Can it go down in value? Why do you need to purchase an annuity that can lose value?
6. Learn about how this annuity is going to affect your taxes when you take money out. Annuities are taxed a little differently than other investments. Is your annuity in an IRA? How does that affect your taxes? Also, if you are passing this annuity down to heirs then why are you purchasing an annuity?
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. Before you purchase an annuity be sure that you can afford to have your investments down when you need the money. That could be very bad for income generating purposes. If you think that may be a problem then do not purchase variable annuities.
For purchasing a fixed annuity:
1. Check the surrender charges again. They are usually higher on fixed annuities than any other kind of annuity. Be sure that when you need money it will be available with no charges.
2. Fixed annuities have amazing guarantee options. If you want one of these guarantees be sure to understand it entirely. What happens when you take money out? Look for the penalties not the process of taking money out. You can also compare options with other companies. There are so many now, some other insurance company could have a better option to fit your situation.
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.
Be certain to get all of these questions answered when you purchase an annuity. Most importantly, do not be pressured or pushed into making any decisions. There is no reason at all to rush through the decision making process with such a long term investment and such a big decision like purchasing an annuity.
About the Author:
For step by step help on how to purchase an annuity please visit Keith's Annuity Help Now blog or request his 7 Free Retirement Annuity Tutorials that show how to set up your retirement accounts to never go down again while filling up your pockets with the cash you need for your retirement.
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