Annuities are a unique financial tool used by some to fit a specific need.  Since they are not used by everyone, they can seem a bit of a mystery.  However, if you have one of the five (5) specific needs summarized below, an annuity may be the right tool for you.  If you want to read more in depth about each need, please read the article by LifeHealthPro.

1. Clients who need a known income stream.  “For the client who requires a certain income stream commencing within one year, an immediate annuity is an almost intuitive choice. Providing income— certain as to amount, duration, or both—is what an immediate annuity does. But first we need to ask a key question: For how long will the income stream be required?  If the need is for an income for life, an immediate life annuity makes good sense. It is the only financial instrument that can guarantee a specific amount of income for as long as the recipient lives.”

2. Clients who need a guaranteed rate of return.  “A deferred annuity offering a multi-year interest rate guarantee may well provide a solution.”

3. Clients who need a better nonguaranteed rate of return. “For clients who require a guarantee of principal and are willing to accept a current rate that may change, deferred fixed annuities may offer better returns than certificates of deposit or individual bonds. The interest rate history of many fixed annuities has exceeded that of CDs, although there can be no assurance that this will hold true in the future.”

4. Clients who want and need income tax deferral.  “Tax deferral is perhaps the most advertised and promoted advantage of deferred annuities. Earnings are not taxed until distributed, either to living contract owners or beneficiaries.”

5. Clients who need a guaranteed payment in the event of death.  “However, when the need for such guaranteed death benefit is a primary concern, life insurance generally represents a far more efficient solution, if available.”

If you are considering an annuity for this last reason and would like to see if life insurance is a better fit for you, please complete the form below and one of our experts will be in touch with you shortly!

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Thank you; we look forward to learning from you too!

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