Articles, Information, Resources

Insurance companies issue annuities, a form of investment that are generally offered via Insurance brokers. Once an investor pays into the annuity, the annuity earns interest for a set period of time. With fixed annuities, the capital invested is guaranteed. They are a safe, popular and tax-deferred way to increase your wealth.

Annuities can be structured in a number of ways; varying accumulation period, length of income payments and other factors. Investors get the security of a fixed income when they choose a "fixed annuity" option. Issuing insurance companies guarantee a minimum interest rate for a set period of time with a fixed annuity option. Most of the companies also pay a minimum benefit. Since the payout is fixed over a period of time, investors are aware of the expected income over the payout period.

Fixed annuities can be paid out in various ways: for one purchased with a lump sum payment, fixed monthly income can immediatly be paid out to the investor. The buyer receives a guaranteed, regular flow of income from his lump sum investment.

If you decide on fixed annuities, it can either be funded with one lump sum payment or with a series of smaller payments over the course of time. The returns from traditional fixed annuities are guaranteed to increase as they do not depend on increases in the stock market or other equity investments. There is a steady return of interest and also a steady future incom to the investor from the annuity.

Deferred annuities can be a useful tool to add to a retirement portfolio. The investor can choose to deposit a lump sum into the account where it will accumulate interest over time, or make periodic payments into it. After a set amount of time, the returns are paid out. This is a form of fixed annuity.New retirees sometimes neglect to calculate their income requirements after leaving a regular paycheck. An income annuity can sometimes be the perfect solution.