Best Annuity Investments in this Economy

The American economy has begun showing its first faint signs of recovery. Leading financial analysts agree that long-term economic indicators hit their bottom and turned back upward in November of 2008; short-term indicators bottomed and began showing modest gains in February of 2009. Although Dow-Jones Industrials always warrant caution, during March of 2009, the stock market showed its greatest one month gain since 1938 and it reclaimed 8000 early in April.

Investors, who protected their assets, moving them to certificates of deposit or treasury notes, should consider annuity investments. Moving their funds into a fixed or variable annuity, investors will enjoy security and tax benefits while capitalizing on the market’s recovery.

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Buyer Beware

Five American insurance companies with highest name recognition among consumers stand at-risk of failure.  Morgan Stanley reports, if Ameriprise Financial’s life insurance and annuity investors begin surrendering their holdings and moving their money elsewhere, the company is extremely vulnerable. Policies and products subject to discretionary withdrawal account for 50% of Ameriprise’s portfolio; the industry averages 15%. Substantial declines in their portfolios also have rendered Genworth Financial, Lincoln National Corp., and Principal Financial Group extremely vulnerable. All four major insurers’ share prices declined more than 60% between April of 2008, and April of 2009.

The Hartford, one of America’s most respected insurers, also continues to struggle. Standard and Poors has downgraded the Hartford’s credit rating because funds required to fund its variable annuity commitments substantially could exceed its assets not committed to other parts of its business. During 2008, The Hartford lost $2.75 billion. Investors must follow The Wall Street Journal, Bloomberg Reports, and other financial publications, tracking insurance companies’ credit ratings and share prices. In addition, when investors discuss their options with brokers, they must demand detailed information about variable annuities current performance. Narrowing their choices and preparing to commit their money, investors more than ever must scrutinize product prospectuses because only a prospectus details every term, option, cost, and condition in an annuity investment. Prospectuses for annuity products are available for download from insurance companies’ websites.

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Continuing its distinguished history of prudent investment and excellent performance, Metropolitan Life Insurance remains strong and viable. The company and its annuities continue steady growth and solid returns despite economic downturns.

MetLife’s “MAX Income Immediate Fixed Annuity” especially stands out among the best annuity investments. Annuities are the only investment instruments which guarantee lifetime income, and MAX Income assures reliable growth and continuing tax advantages. Depending on the annuity’s term and an investor’s choices about early surrender privileges, MAX income guarantees between 3% and 6% annual earnings as it delivers regular payments monthly, quarterly, twice-yearly, or annually.

 

Every annuity contract has three critical terms: (1) ”the annuity owner” has all the rights to the income annuity and controls who receives payment. (2) “the annuitant” is the person whose life determines how long payments will continue and sometimes establishes the dollar amounts of the payments; and (3) “the beneficiary” continues receiving regular income or a lump-sum payout when the owner and other annuitants die. In the majority of cases, the owner is the principal annuitant.

MetLife MAX Income offers investors five payment options to suit their needs and circumstances:

  • Owners may choose lifetime income, which provides variable income for as long as the annuitant lives.
  • Or they may elect lifetime income with a guarantee period, which assures a continuing income as long as the annuitant lives and also guarantees payment for a number of years. Even if the annuitant dies, payments continue to the owner or beneficiary for the annuity’s full term—up to thirty years.
  • Married investors most often choose lifetime income for two, which continues making regular payments as long as either of the two annuitants lives. As they negotiate and execute their annuity contract, the owners decide between continuing payments in the same amounts for the duration of the annuity or reducing payments when one of the annuitants dies.
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  • For even greater security, many investors elect lifetime income for two with a guarantee period. Under the terms of this option, the annuity continues payments to the annuitants as long as they live. If they die before expiration of the guarantee period, payments continue to their beneficiaries until the guarantee period runs out.
  • Investors who have reasonable assurance of steady income from Social Security and a guaranteed pension fund sometimes prefer to increase their regular payments, selecting income for a guaranteed period,  which then will make variable income payments for the guarantee period—anywhere from five to thirty years. If the annuitants die before the end of the guarantee period, their beneficiaries continue to receive payments until the period expires.

MetLife’s history, reputation, and continued strong performance stand-up well under rigorous scrutiny and few fixed annuities offer as many payment options. As the economy recovers MetLife’s MAX Income Fixed Annuity promises to remain one of the industry’s best annuity investments.

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