Retirement could be one of the most remarkable experiences a person can have. Some retired individuals still want to earn income to protect their assets. Insurance companies offer to have annuities that give financial security to retirees that guarantee payment either for life or a specific period.
What are Annuities?
Annuities are long-term care protection in the form of a retirement income. It is a contract between a person interested in investing money for a steady cash flow and an insurance company that serves said interest. Insurance agencies offer annuities to individuals that seek to address the risk of outliving their savings.
Type of Annuities
Potential buyers can get an annuity that can be paid immediately or depending on the person’s retirement needs. The burden of a person outliving his/her resources is the responsibility of the insurance agency. There are different forms of annuities being offered by insurance companies, but below are the two types of annuities in general:
- Fixed Annuities
The buyer is guaranteed by the insurance company with a minimum interest rate and a fixed annuity. If the insurance agency is financially stable, then the individual’s money invested in a fixed annuity will continuously grow. The money will not drop in value for as long as the insurance company has an excellent financial stronghold.
- Variable Annuities
Money is invested in a fund that the person chooses. The earning from this type depends on the investment performance of the fund. It provides more earnings, but it comes with a lot of risks.
- Fixed-Indexed Annuities
This type of annuity is a tax-deferred long-term savings option in a down market but with fewer risks. The money invested here is protected. Growth is more possibly seen here than in variable annuities. Investment returns will be partly based on index performance.
How to Know What Annuity to Get
It is better to get financial advice from an accredited insurance agency with an excellent reputation in providing annuities. Annuities are good plans for retiring people, but it is a complicated area for financial planning. Thus it is best to get an explanation and quote from the right company or people.
Annuities can be a good investment for people that are about to retire but still want extra income. It is crucial to choose the right type of annuity to ensure that the money invested will grow and be protected by the insurance agency.
At The Modern Medicare Agency, we aim to provide comprehensive insurance policies that make your life easier. We want to help you get the insurance that fits your needs. You can get more information about our products and services by calling our agency at (631) 358-5793. Get your free quote today by CLICKING HERE.