4 Beneficial Ways to Purchase an Annuity
Purchasing an annuity is no doubt an important decision. There are a plethora of factors to consider in this decision, and you must really plan wisely and budget accordingly before deciding to consider the plunge and buy one.
Established a goal in your mind
Forward planning is usually essential if you're setting up a goal to purchase an annuity. Before searching for annuity insurance leads, you should already have set aside the desired amount of money for your 401(k) plan, IRAs, as well as Keogh plans. It is a good practice to maintain a fixed amount of cash in savings for the main purpose of buying an annuity later on. It's best to have a well-established plan, including an investment goal in your mind, so that you could chart your improvement and at least have a rough plan to follow.
Select which plan best suits you
Prior to selecting which annuity to have, you should be well-informed about the different types of annuities available. Factors you must consider when examining these plans include learning the degree of risk you're ready to incur in both the worst and best situations, as well as how soon you'd require the money or the annuity to mature. Every plan gives returns based on several standards such as
• Equity indexed annuities will give you earnings according to a prefixed equity index.
• Variable annuities have profits depending on the returns of the investment options which are associated with that annuity. These could fluctuate with market conditions, however the advantage of this particular annuity is that upon death, your receivers stand to inherit a particular amount of cash from the annuity.
• Fixed annuities give dividends based on a fixed rate, and payouts vary based on the alternatives which you choose. If you are able to afford it, you can buy the whole annuity in one large lump sum, or you may choose to do this in monthly, quarterly or yearly installments.
Evaluate different businesses
An annuity is a serious investment, so you need to first read the evaluations of the company which you plan to buy it from. Ratings from A.M. Best Company, Moody's Investor Service, Standard & Poor's, and Weiss Safety are examples you could utilize as reference points. This is vital for fixed annuities, since the returns are directly connected to the corporation's financial situation. You should also review deals for clauses that offer flexibility for you to access your funds in cases of emergencies with out imposing a fee. Be sure that there are no hidden rates in the deal and be mindful of added fees on top of your principal payment. A financial counselor would be the best person to talk to in this instance because he or she could offer you a clear idea of what's at stake and what there's to get.
Make a well-thought-out decision
It's only after you have made thorough and comprehensive research on the wide range of annuity choices which several agencies have to offer that you will be able to create a final decision on the plan to invest in. It is a great idea to look for the assistance of specialists or people you trust concerning the suitability of your monetary situation to the annuity that you want to buy. Sometimes people tend to overcommit to a purchase before realizing a little too late that they just can't afford it. Prevent this by obtaining guidance from the people around you and do not jump to quick decisions. Instead, take your time to decide which annuity you should get, so that you don't regret later on in life.
About the Author
Written by Patricia Strasser. For more information on annuity insurance leads, have a look at http://www.toppickleads.com/annuity_leads.html
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