Is an Annuity Right for You?

An annuity is a financial product offered by insurance companies. There are three types of annuities. One is called a Fixed Rate Annuity. These involve an initial lump sum payment or a series of small payments and in return the insurance company guarantees a fixed interest rate on your investment. Most insurance companies also guarantee payment in a fixed amount, for example, $500.00 for 20 years.

Then next one is called a Variable Annuity. A Variable Annuity is another financial contract; however, the payment amount is not fixed but is determined by the performance of the investment portfolio associated with the account. Finally, the third kind is an Equity Indexed Annuity. This kind of annuity is a tax deferred annuity that has returns based on the performance of an equity index market, such as the S&P 500. Gains in the equity market add to the annuities’ returns.

For many individuals and families an annuity can be an excellent way to invest money for the long term, receive tax deferred growth on earnings and even receive a death benefit. However, since everyone’s financial situation is different, it is always a good idea to either talk to your insurance agent or your financial planner to decide if annuities are the right choice for you. Log on to www.mybenelife.com for more information and to get connected to an agent right away.