Annuity

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Annuity An annuity is a contract between you and an insurance company in which you make a lump-sum payment or series of payments and, in return, receive regular disbursements, beginning either immediately or at some point in the future. The basic idea of an annuity plan is to invest regularly or a lump sum amount and get a regular income for life. Buying the plan early will provide you a higher amount. An annuity can be in the form of a deferred or immediate; -A deferred annuity has an accumulation phase followed by a disbursement (annuitization) phase. -An immediate annuity converts a lump sum into cash flows from day one. When you purchase an annuity, your premium is placed in an investment portfolio called an annuity fund. This portfolio determines the rate of return you will earn on your annuity. Annuities come in three main varieties fixed, variable, and indexed each with its own level of risk and payout potential. People typically buy annuities to help manage their income in retirement. Annuities provide three things: 1)Periodic payments for a specific amount of time. This may be for the rest of your life, or the life of your spouse or another person. 2)Death benefits. If you die before you start receiving payments, the person you name as your beneficiary receives a specific payment. 2)Tax-deferred growth. You pay no taxes on the income and investment gains from your annuity until you withdraw the money. Insurance companies sell annuities, as do some banks, brokerage firms, and mutual fund companies. Make sure you read and understand your annuity contract. All fees should be clearly stated in the contract If you want a guaranteed1 income for life, especially post-retirement, you should consider buying an annuity plan. The objective of an annuity plan is to ensure financial freedom during your retirement, when your regular income stops. You can use the payout from an annuity plan to cover your day-to-day expenses during retirement and to fulfil your post-retirement dreams, such a
s travelling, starting a venture, pursuing a hobby, and more. #benewinsurance #insurtech #inclusiveinsurance #insurance #reinsurance #takaful

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