Articles » Intro to Annuities

What most people don’t know about annuities would fill a book. That is because annuities are contracts that contain many features, benefits, and costs. Rather than attempt an encyclopedic recitation, this article will focus on basic elements of annuity structure that are not well ...

Annuitization is the process of converting a capital sum into a level, regular stream of payments. In practice, annuitization is normally synchronized with retirement, although this is not invariably true. By definition, retirement signals the end of earned income. The retiree will need to ...

Few topics in finance preoccupy the general public more than when to purchase assets. Popular wisdom envisions investment success as knowing when to buy and (although this gets less attention) when to sell. In fact, this mentality is suited for trading, not investment. Few people possess the ...

Every financial professional periodically faces the following question: Is X a good investment? X may be stocks in general or a particular stock; bonds in general or the debt of a particular company or government; a real asset such as gold or real estate or Egyptian ceramics; or a ...

Time was when the financial world was neatly compartmentalized and access into and between the different compartments was strictly limited. If you wanted to buy insurance, you called up a particular insurance company and made an appointment with a representative, who came to your home. You ...

Unlike bank deposits and CDs, annuities are not covered by federal (FDIC) insurance designed to protect consumers from the consequences of the issuing company’s insolvency. Insurance companies are regulated at the state level, however, and each state has a guaranty fund intended to ...

Structured settlement annuities are specialized annuities issued by insurance-company affiliates to compensate plaintiffs in personal-injury tort litigation. They are the artifact of two institutions: the court system and the tax system.

Prior to 1982, personal-injury plaintiffs ...

In the classic sense, annuities are intended to be terminal vehicles. That is, they are inherently designed to provide guaranteed income for life and cease operating only upon death of the annuitant(s). Annuities are retirement-oriented financial instruments, geared toward the final phase of ...

Annuities are contracts between individuals and insurance companies. Annuities are investments that also possess various insurance features. The purpose of insurance is to reduce risk. Thus, the association of annuity investment with risk may seem anomalous. In fact, risk is omnipresent and ...

An annuity is a contract between an individual and an insurance company. The individual pays the insurance company money, either in a lump sum or regularly over time. The money is invested. When the individual retires, he or she begins receiving regular payments from the insurance company. The ...

The word annuity refers to a regular stream of level payments, whose duration may be specific or indefinite. In the United States, the word has come to be identified with multi-purpose insurance contracts terminating in a payment stream. This makes it logical to ask: What is an annuity ...

How do annuities work – and what do they mean for your  financial situation? Annuities can be an effective insurance investment for you  and your family. However, just like any other financial choice, a wise investor  should research annuities and see how they work to determine ...

Annuities have lately become some of the most popular investment options available to many people, especially among retirees and people who are prudently preparing for their retirement.

An annuity can be described as an arrangement in which the annuitant (the person taking up the ...

If a person has a lot of money and decides not to spend it, there are ways of making this grow. One option is keeping it in the bank and letting it grow interest. The other is investing it in the stock market with the help of a financial consultant. This professional will be able to know ...

Annuities can be very good things for some of us and a disaster for those of us who have not been made aware of the pitfalls and traps that in turn can easily befall them. Since most people have or are going to look into annuities as a retirement or and an investment vehicle, make sure it ...