Tips To Consider Before Buying An Annuity Policy

Tips To Consider Before Buying An Annuity Policy



Tips to​ Consider Before Buying an​ Annuity Policy
Annuities may be a​ useful tool for those who want a​ steady stream of​ income throughout their lives .​
While most annuities include a​ death benefit, an​ annuity is​ almost the opposite of​ a​ life insurance policy - annuities offer financial protection against outliving your income .​
Buying an​ annuity can be a​ complicated decision .​
Following are a​ few key considerations for buyers before deciding whether to​ purchase annuity policies:
* Review all of​ your other savings plans, pensions or​ retirement funds to​ determine whether you need an​ annuity and whether the annuity you are considering is​ the right one for you based on your age, financial status, investment objective and risk tolerance .​
is​ there a​ possibility that you could outlive your assets? Will you keep the annuity long enough so that the charges do not eat up your investment?
* Determine whether you want your investment to​ be steady and fixed or​ variable .​
While variable products offer an​ opportunity to​ capitalize on market highs, they also carry additional risk in​ a​ downturn.
* Be careful about exchanging one variable product for another .​
For instance, exchanging a​ variable annuity for a​ fixed or​ equity-indexed product may result in​ a​ surrender charge and higher annual fees, along with a​ new period of​ time during which you cannot withdraw money from your account without substantial surrender charges .​
Always check the schedule of​ surrender charges and other fees .​
They may be higher on the variable annuity with the bonus credit than they were on the annuity you already own.
* Make certain the company from which you are considering buying an​ annuity product is​ reputable .​
a​ good place to​ start is​ to​ look for the Insurance Marketplace Standards Association logo .​
Only companies that have proven through extensive outside review that they adhere to​ IMSA's stringent Principles and Code of​ Ethical Market Conduct can display this logo .​
Visit www.IMSAethics.org to​ see if​ the company is​ listed and for other information.
* Be sure the company offering the annuity product is​ financially strong .​
Many independent services rate the financial strength of​ insurance companies, such as​ Standard & Poor's Insurance Rating Services (www.standardandpoors.com), Moody's Investor Services Inc .​
(www.moodys.com), Fitch Ratings Inc .​
(www.fitchratings.com) and A.M .​
Best Co .​
(www.ambest.com).
* Check with your state's insurance department to​ be sure the company you're considering buying from is​ licensed to​ do business in​ your state .​
* Remember, an​ annuity is​ a​ legally binding document .​
Read the annuity contract carefully and be sure your agent has answered your questions thoroughly before you buy .​
- NU




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