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The Best Time to Buy Annuities

An annuity is an amount paid by a customer to any insurance firm for pension needs or for any lump sum of money after a span of time. A customer can start buying annuities upon reaching the age of 50 to 75years old, though age requirement has now been moved to 55 years old above. Before purchasing an annuity make sure that all the aspects of an annuity and all the differences are checked. There are suitable annuities for different types of people. These are divided into the uses such as-as to when payment begins, according to the method of premium payment and according to where assets are invested. Annuities that depend on when payment is made are the immediate annuity and the deferred annuity. Annuities according to method of premium payment are the single premium and the flexible premium. Then for annuities which fall under where assets are invested are the fixed and the variable annuities.

There are factors to determine before buying annuities. Since there are many kinds of annuity depending on purpose and use, a customer should first determine what would best suit him after retirement before buying annuities. People usually purchase immediate annuities when they want to gain a lump sum of money from all the payments made periodically, since this sort of annuity can also serve as a means of income. The deferred annuity is purchased by those who would want their money to grow due to tax deferred until a certain span of time stated in the contract, now this sort of annuity has two divisions the fixed annuity and the variable annuity. The fixed annuity is a safe investment for those who would like their income taxes to be deferred on the interest earned. Variable annuities are purchased by those looking for a tax deferral and want to make sure of a pension income for them.


There are also other factors to consider in purchasing an annuity like the health and the increasing payment through a certain span of time. In buying annuities a customer does not need to purchase it from the same company that holds the customer's pension. In purchasing an annuity a customer should consider the amount to be given per month or annually serving as a pension. It could increase per month or could be fixed at the same rate. Most customers would want free reign and control on their savings. Now when searching for a good insurance firm to place your pension income, a customer has an open market opportunity. This means that the customer does not have to go with their company's pension firm; this would give the customer time and opportunity to seek out better firms that would provide them with higher rates and better monthly withdrawals. Just by simply looking for insurance firms a customer could increase their rate by 20 percent. Thus, before a customer would purchase an annuity, they should be certain that the insurance firm has higher rates for buying annuities and has a good financial income. This is important before buying annuities because once an annuity is bought a customer cannot change it.

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