Annuities:  The Shocking Truths Revealed

Discover the Shocking Secrets About Annuities that Banks
and Insurance Companies Don't Want You to Know.

-- By Tony Bahu
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Benefits of annuity

Before we understand the various benefits of annuity, it is important to have a fair idea about annuity and its various types. Annuity may be defined as fixed amounts of money paid over a specified period of time. These instruments are usually manufactured and offered by insurance companies. Annuity can broadly be classified as immediate annuity and deferred annuity, which can further be sub-classified. The benefits of these are listed below.

Immediate annuities
Immediate annuities are a wonderful tool for distributing savings over a period of time. These provide guaranteed payments and are less risky investments as compared to the stock market. Besides there are various options available today that are suited to individual needs.

Deferred annuities
These offer the buyer a safe interest rate return on the money invested and is a wonderful mode of accumulating savings. These are tax deferred until the amount is withdrawn. There are various kinds of deferred annuities, each offering its own set of benefits. For example, fixed deferred annuity grows by interest rate alone. Variable deferred annuity permits allocations to stock or bond funds and Equity Indexed Annuities or EIAs offer a guarantee that the account value will never drop below the initial investment.

Immediate life annuities are often a compulsory feature of pension saving schemes and are an excellent manner for providing income streams over the life of the annuity holder in the form of pensions.

Government incentives
Annuities have favorable tax treatment because of cross-subsidies and guarantees that annuities can give against running out of income during the old age. This includes tax deductions or benefits like pensions free of income tax.

Benefits for spouses
At a cost to payments, an annuity may be purchased with additional coverage for a spouse. One may opt for partial or total coverage as the need may be. In cases like the reversionary annuity, the insurance company will continue to pay the spouse even after the death of the annuitant for as long as the spouse survives.

Benefits for impaired
Annuities also offer coverage for smokers and those with particular illnesses. As the life expectancy is shortened in such cases, the payment for the purchaser is increased.

Other benefits
To make annuities more attractive, various insurance companies offer death benefit options, living benefit options and withdrawal benefits also.

While many insurance companies offer annuities, it may be difficult for you to choose the best benefits among the overwhelming choices available. This is where we at come in with our expertise and experience. We help to make the path smoother for you by comparing various options and giving you deals best suited for your purpose.