ANSWERS: 1
  • Life insurance is one of the most important investments you can make in your future and the future of your loved ones. A life insurance annuity is somewhat the opposite of the traditional thought process behind life insurance. Instead of paying out at death, the annuity pays out payments to you at a specified time in exchange for a single payment or series of payments.

    Future Income Annuity

    There are several types of annuities. Future income annuities allow you to invest money in the form of premium payments that collect interest at the current rate over time. There are several payment options at the end of the term.

    Guaranteed Income Annuity

    Guaranteed income annuities allow you to invest a single large lump sum of money and receive regular payouts over time after activating the plan.

    Flexible Annuities

    Future Income Flexible Annuities allow you to invest money over time, which in turn is invested in funds, similar to a 401(k). You receive scheduled payments at regular intervals.

    Primary Purpose

    Annuities guarantee income in the event that you outlive your other savings and investments.

    Secondary Use

    Annuities can also be used to set aside money for future use while earning a higher rate of return than typical savings account. This money can be used for large purchases such as a home or car or vacations. There are no restrictions on the use of the money.

    Source:

    State Farm

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