Mortgage Guide » fixed annuities http://www.e-mortgageguide.com Blog that provides useful tips and information about the Mortgage Industry Sat, 30 Apr 2011 10:08:18 +0000 http://wordpress.org/?v=2.9.1 en hourly 1 Fixed Annuities Provide Many Options For Investors http://www.e-mortgageguide.com/2010/02/24/fixed-annuities-provide-many-options-for-investors/ http://www.e-mortgageguide.com/2010/02/24/fixed-annuities-provide-many-options-for-investors/#comments Wed, 24 Feb 2010 19:30:30 +0000 Nick Jameson http://www.e-mortgageguide.com/2010/02/24/fixed-annuities-provide-many-options-for-investors/ Insurance companies offer annuities as a retirement planning option through Insurance brokers. In this mode of wealth accumulating investment, investors pay an amount, which is returned by the annuity after a fixed time period. The principal amount is guaranteed with fixed annuities. Annuities allow investors to create safe, tax-deferred retirement savings plans.

Several factors are used to structure annuities such as changing the time period of money accumulation, changing the number of income payments and others, etc. A fixed annuity offers security to the investor as the issuing company confirms a minimum interest to the investor for a set period of time beforehand. Often, with fixed annuities, policyholders can get a minimum benefit payment as well. Thus, in the case of a fixed annuity, the investor already knows the expected income from the annuity before signing the contract.

A fixed annuity can be funded with one large payment, or with a series of payments over time. Returns on traditional fixed annuities do not rely on increases in the stock market or other equity investments and funds are guaranteed to grow. There is a stable interest return and future cash flow from the annuity to the investor.

Fixed annuities are paid out in different ways. One option is immediate payment annuities. This option allows individual investors to turn a lump sum into a stream of income because the annuity is paid out at a fixed monthly rate, beginning immediately.

With deferred payment annuities, investors have an option of either depositing a lump sum which accumulates interest over time, or make payments into their annuities, with the maturity value being paid out after a fixed time. This is a form of investment which is popularly used as a retirement savings plan to fill the income gap created after leaving regular employment.

- Nick Jameson

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