An Explanation of Your Annuity Savings
Annuity can be traced back to the Latin word “annus” which is a medium of investment that can be conveniently compared to Certificate of Deposits that banks offer.
In very lucid language, you can refer to annuity as income. On a broader definition, annuity is a contract that guarantees a sequence of payments in exchange for a lump sum savings. I know that more people out there invest in annuity as a source of funds for their retirement days.
But it’s worth mentioning at this point that an annuity isn’t the same as a health insurance or a life insurance policy. There are also many that erroneously think that annuity is the same as savings certificate or savings account.
If you want instant gratification, then don’t buy annuities because they are for long term purposes. An annuity can go a very long way in helping anyone build and preserve wealth for future gratification. Most people are familiar with the fixed annuities and the variable annuities.
For the “fixed” type of annuity, don’t think “fixed” here refers to fixed interest; far from it, it only means that the premium that one earns gets an interest rate that’s guaranteed. But variable annuity is for those that want to take risks with their money; it is the annuity type that goes up and goes down.
Like someone once said “know everything about what you are doing”; that also applies to annuities - learn all there is to learn about annuities before you go ahead to buy.
In conclusion, you can also talk to others that have bought annuities to know what to do and what not to do.
Steve Symes is a writer of great articles both for the Site for Understanding Credit/Finance web site which includes Credit Repair information.
He also contribites to the Dog Breeds Compendium.
Tags: Financial Management