Annuities

Life is filled with lots of unexpected twists and turns and no one can change the fate of a person or once own destiny. Though death is a natural phenomenon which may happen at any point of time there are people who face unnatural death during their prime age due to road accidents or industrial accidents. There are hundreds of people those who involve themselves in road as well as industrial accidents and encounter grievous injuries such as permanent total disablement. The court of law after hearing the complete proceedings decides the quantum of settlement in favor of the innocent victim after taking into account the pain and suffering, hospitalization expenses, loss of income and other such extraordinary expenses incurred by the victim and pronounce the judgment. Claimant at times opts for a structured settlement wherein the settlement amount will be converted into annuities and paid at regular intervals by the life insurance companies to the victim.

The court of law will always treat the life insurance as the Annuity Company and direct them to pay the obligatory annuities regularly. It is considered as a legal binding and the designated life insurance company has to compulsorily pay the annuities regularly to the road accident victim failing which the victim can sue the insurance company for service deficiencies. Annuity Rates will not be the same and may differ according to the performance of the insurance companies and other external economic factors. Statisticians consider that the annuity rates will remain inconstant and no one can exactly predict the economic climate of the country and the performance of the insurance company after fifteen or twenty years. So, even the senior financial experts cannot predict whether Annuity Return will be extremely good or not. But financial experts consider that annuities are considered as a safe investment.

Are annuities a good investment?

Calculating the Value of an Annuity is a scientific process and only few experts can predict the returns accurately. But there are annuity calculators which will be of great help to the investors. These annuities calculators future value will be of immense help to the investors. There is a question in the minds of the public – Are annuities a good investment? This is a very difficult question which cannot be answered that easily. Experts consider that annuities are much safer than other types of investment even though the return on investment and interest rates are much lower since the amount is invested in government bonds. Purchase an annuity after discussing with the financial experts of insurance consultants. Decide to buy an annuity after thoroughly understanding the future requirements and consulting the experts who have knowledge in this area. Purchasers of the annuity will get wonderful annuity quote since there are lots of intermediaries those who have expert knowledge in this field. There are also lots of online annuity calculators which will be of immense help to the people who are purchasing annuities.

There are different annuities that are available in the market and the two types of annuities that are available with a life insurance company namely deferred and immediate plans that have advantages as well as disadvantages.

Advantages of annuity:

There are several benefits in annuity, few among those are;
1. Guaranteed regular income
2.Account for inflation
3.Increase for requirements

Guaranteed regular income:

Guaranteed regular income is the greatest benefits in annuity. you will be provided with guaranteed and reliable income every month. It is low risk and will not be subject to stock market flutters when compared to other investments.

Account for inflation:

Due to inflation, the prices increase every year likewise your income varies from year to year. There are few options in annuity which will increase in value, in order to compensate the inflation. This will help you to lead a comfortable and happy retired life.

Increase for requirements:

You will have annuity options which will pay out higher income, when compared to other structured annuities for your medical and other health issues.

There are different annuities that are available in the market and the two types of annuities that are available with a life insurance company namely deferred and immediate plans that have advantages as well as disadvantages.

The other popular annuities are variable annuity and equity indexed annuity.

Annuity Tax

Annuity Comparison plays a pivotal role since the customers will get an answer with respect to which plan will give him best returns in the future. Compare the annuities and choose the best one which will bring handsome money after several years. Annuity investment is an intelligent decision and the investor has to carefully evaluate the pros and cons of the company and their plans. Annuity tax is a very interesting subject which every investor has to have some understanding. There are various laws that apply to the annuity and the investor should consult taxation experts in this peculiar subject. A qualified annuity is taxable under the prevailing law. Even withdrawals are also taxable. It is always better to consult the taxation expert since he will be able to provide complete information. It is imperative to note that annuity interest rates will be changing periodically according to the financial conditions of the company. Before a person reaches the retirement age he can borrow Annuity loans which he has to repay over a period of time. Person applying for these types of loans have to pay both principle and the interest.

Annuities risk

Annuities risk is many and the investor should not invest the fund in one insurance company and spread it across several companies. Investor should check the performance of the fund using Annuity growth calculator. Annuities advantages and disadvantages are many and the investors should keep in mind that they are taking risk when they are investing in these annuities. Inflation, economic situation, performance of the company, performance of the fund and other aspect plays a vital role. Though annuities are considered as extremely safe it also comes with certain risk. Some of the annuity negative aspects are return on investment will be pretty low, withdrawals may be taxed, loss of liquidity since money is locked for certain period and there are certain risks involved in annuities.

Annuities- how do they work?

The annuities are generally invested in the government bonds or in the long term funds and the investor will receive the amount periodically as per the contract signed with the insurance company. General principle is that when the insured lives for a very long time he will surely get lesser than what he has invested. So, to conclude the investor should be an intelligent investor and should spread the risk properly. Investor should take the help of senior financial or insurance consultant before choosing the annuities.