Is Variable Annuity A Smart Investment?

A variable annuity is a form of life annuity that returns a benefit payment with a variable interest rate. If invested properly, variable annuities can return a profit, but there is always the risk of making a bad investment. Read on to find more about annuities and their benefits.

About life annuities

annuity 2Unlike life insurance policies, life annuities pay the benefit to the owner during his or her lifetime. You, as the annuitant, will make a single lump payment (or several regular payments) to an agency who will then invest your money and pay you back regular monthly benefit after several years. The waiting period is also known as the accumulation phase and its length depends on the type of annuity you buy.

In the case of variable annuities, the lump payment you make is invested in different stock bounds accounts. The rate of return will be heavily influenced by the investment you manage to get out of stock bounds.

This means that although you may get more money than through a fixed rate annuity, you can also lose during the accumulation phase.

Also, as a client, you have little control over your investment, which is not truly investing yourself, but having someone else do it for you.

Should you buy a variable life annuity?

Buying a life annuity is always a good idea, especially if you are approaching retirement. You should first look at some life annuities offers or search for a term life insurance quote. Life insurance is also important as it protect your family from financial difficulties. Life annuities, however, will provide you with a steady income during retirement.

The money you will receive after the accumulation phase can be used in various ways and since retirement is a period with limited financial source, having some extra income is always welcomed!

If you need more information on life insurance or annuities, do not hesitate to visit our website! We provide detailed information and we have contacts with top insurance providers in the country! Visit us and find the best offers available!