Fixed Annuity - Choose the right plan to get highest benefits - By: Mike Anderson

The financial stability is one of the greatest concerns for each of us. And thus it is very important to go for investment schemes that are long term. Some retirees opt for the pensions while others like to depend on the stock markets. But why should you go for such unsecured investments which guarantee no fixed income? Instead you can opt for annuities.

An annuity is a contract that is drawn between an insurance company and the insurer. It guarantees a regular monthly payment for the rest of your life. Annuities are the most feasible investment plans for the security of retirement. There are several annuities and some of them are discussed below along with their features:

What are fixed annuities?

There are basically two kinds of annuities. They are the fixed annuities and the variable annuities. The fixed annuities are a stable way to earn post retirement. It is one of the most reliable ways of earning money after retirement, and you can be assured that there would be no complications or fluctuations in the market. The returns are also fixed and thus there is no fear of any decreased payments.

The fixed annuity plans ensure that the principal is insured against any loss as long as you do not give up the annuities during the surrender period. The variable annuities do not insure the principal against any loss and thus there are chances of losing the money. The fixed annuities are of three types. They are the immediate annuities, fixed equity index annuities and the CD annuities.

The immediate annuities pay a small rate of return that is also internal and values at 65 basis points along with your principal amount over the given tenure. This might not give your investment great returns. It also has an option of “life annuitization”. This insures an income as long as you live. But this is only valid as long as you live and once you expire, your spouse will not receive any amount.

The fixed equity index annuities involve a guarantee against the loss if you keep the annuity beyond the period of surrender. It also offers a return on the market index. It is rather safe than the immediate annuities.

CD annuities were much popular during the nineties. Nowadays, the product offers a bonus of 6% to 8% during the first year and comparatively a lower return of 2% from the next year continuously. Since the yield is poor, it is not much popular these days.

Always remember, it is extremely vital to check the annuity rate before investing on the annuities. If you are unable to get the annuity rates by yourself, get in touch with an annuity expert either on line or in person.

If you wish to get the maximum out of your lifetime income and also want to recover the initially invested amount, then make sure to invest after going through ample research. Also get advice from an annuity expert before investing since annuities involve your future.

About the Author

Mike Anderson is a business consultant who has good information on fixed annuity and annuities. For more information visit http://www.immediateannuities.com/

Article Directory Source: http://www.articlerich.com/profile/--Mike-Anderson/93079

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