You should never be surprise if an insurance agent or a tax preparer tries to sell the investment called a index annuity. Research has shown that index annuity remains the type where returns are attached to the functioning of a group of securities such as stocks in the S&P 500. From research and feasibility study, it is clear that this product can help people achieve their financial objectives. This is only when perfectly selected and carefully used. It is important to know that this product remains no means a one-size-fits-all solution.
It is important to know that purchasing any type of annuity remains the reverse of buying life insurance. When annuity is being purchased over a huge amount of money to an insurance firm, the fund will certainly yield interest with time. You also have the capability of receiving guaranteed monthly payments. With respect to the choice that you make, payments may extend for 10 – 20 years or the rest of your life.
For instance, if you invest about $90,000 and select the life only option, there is every possibility to make decision on monthly payments. You may decide to receive a monthly payment of about $600 on a monthly basis for the rest of your life. There are some instances where the insurance firm may keep the balance of your investment after death. This is practically dependent on the contract you signed when going into this type of investment. With the same $90,000 investment and 10 years option, you may receive a lower monthly payment. Some insurance company may decide to give you say $500 on a monthly basis for 10 years. Even if you are living or not, your monthly payment will always remain constant. In case you die in the premier month of the contract, there is every possibility for your heirs to receive the payment. Your heirs will have to receive the payment for 9 years and 11 months. On this note, health and age remain unique factors to consider prior to purchasing annuity. You will remain a winner provided your health is in good condition.
Do you know that guaranteed income stream remain the best reason for purchasing an index annuity? With respect to this uncertain economy, people often purchase annuities to make sure that they don’t outlive their assets. Research has made it clear that insurance firms often give older people this option so as to save extra money.
In response to the question that reads, are index annuities a good investment? From the explanation above, you are sure to discover several benefits attached to investing on index annuities. One of the best reasons for investing on this type of annuity is the consistent flow of guaranteed income. There are so many people who can live from the money that index annuities offer them. In fact, they will not have to touch their main investment payment from another source provided the right implementation is applied. Another great benefit of index annuities remains in help clients to save extra money. If right implemented, you will be able save extra monthly income as required.