What is the meaning of annuity insurance?
Retirees and pre-retirees who fear that they run the risk of running out of cash may be good candidates for a fixed annuity in today’s volatile economic environment.
An annuity is a contract between an investor and an insurance company.
With a fixed annuity, you make a payment to an insurance company, and the insurance company makes fixed payments to you that can last for a long period or even life. In Orange County there are many independent insurance agents who specialize in annuities.
That stream of income can offer peace of mind to individuals who are worried about running out of money, because it guarantees that they will have a certain level of income whether they live to 80, 90 or 100 years of age.
Of course, no investment is without risk. For all the peace of mind fixed annuities offer, they can be a tough sell when interest rates are low and many investors are willing to take on the risk of the stock market.
Additionally, some investors don’t like the fact that the money spent on an annuity with no guarantees is gone when the annuity holder dies, leaving nothing for the heirs.
That said, you probably should not invest all of your retirement savings in fixed annuities. Some may be in mutual funds through another retirement plan, perhaps. This could potentially provide you with the opportunity for higher returns that could complement your fixed annuity .
Your financial advisor can provide you with more information about what might be suitable for you given your individual financial circumstances, goals and risk tolerance. To find out more about annuity insurance, contact Peter Green Insurance – an independent insurance broker.