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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Fixed Annuity Quote

If retirement is around the corner, it is time you began planning your finances and the best way to begin is by seeking fixed annuity quotes. Buying annuity is a good way to ensure that you will be comfortable even after the end of your working life. An annuity is a contract that you enter into with insurance or other financial companies under which they give you regular payments for a predetermined term or the rest of your life in return for accumulated premium payments or a one-time lump sum.

Fixed annuity is pegged to the prevailing interest rate and is the preferred option of millions of Americans. Fixed annuity is not subject to the volatility of the stock markets and so there is no chance of your principal shrinking sharply. Even though the returns can be low when interest rates fall, there are rarely dramatic fluctuations in a person's lifetime and that is why many choose fixed annuities for their peace of mind. You always know the rate of interest for each period and that brings a tremendous sense of security

Most fixed annuities also carry a death benefit, which means your named beneficiary/beneficiaries would receive the money you invested in the annuity and any earnings on it if you die before payout. But if you die after payout begins, the insurance company gets to keep your money. To guard against such an eventuality many choose “term certain” annuities, which guarantee that you or your beneficiary would receive payments for a certain period – say 10 or 15 years.

Depending on when you want the payments to start, you would invest in a deferred or immediate fixed annuity. Under a deferred annuity, you would generally pay the insurer regular premiums through an accumulation period (generally at least 10 years) to build up capital. The insurance company would begin making regular payments to you from a date of your choice. Most people invest in deferred fixed annuities when they are in their mid 50s and accumulate capital for about a decade, receiving payments when they finally retire at age 65 or 67. This type of annuity is also tax-deferred, which means your earnings will not be taxed until they are withdrawn – that is until you start taking the money back.

An immediate annuity, as the name suggests, gets you payments almost instantly – even within the first year. For an immediate annuity you need to make a lump sum payment.

If you are shopping around for annuities, take the time to visit and learn about potential pitfalls that you need to guard against. Also remember to thoroughly check the credentials and credit rating of the insurer you are thinking of buying annuity from. Don't make the decision lightly as your future security depends on it.