Of the two types of retirement annuities, variable annuities can have more potential for gain, but annuities with short payment periods can provide even greater gains. In case you are not satisfied with your rates, there are alternatives that can be addressed.
Insurance agreement that supplies regular source of income on maturity to the policyholder, is called Annuity. The Annuity Leads service helps insurance companies identify possible new clients such as retired people. Retirees opt for annuity plans because they can provide them with a stable flow of income in the future. If you are thinking of buying annuity plans for your retirement, it is good to know some things about retirement annuity rates.
Retirement Annuity rates come in 2 forms
One type of annuity plan is the fixed rate type. Your money is invested in some traditional investment schemes or bond funds by Insurance companies. The company will also be responsible for managing the investment once you have submitted the payment for the premium. The next type of annuity is known as variable rate, which, naturally, offers various insurance rates. The company usually sets a fixed minimum rate of return on the investments; however, this may depend upon the performance of the basic investments. 2% to 3% is the range within which this rate usually falls.
You might stand to gain more with a variable annuity rate plan
For those who have retired, it may be wise to choose a variable annuity plan as they have higher potential for gains. There is a greater risk of getting lower returns with a variable rate plan than one that carries a fixed rate.
Annuities that offer payment in a brief time may have more gains
Many annuity policies can be cashed at at different times. However, annuities that provide payouts in a short period, usually about 10 to 15 years, may produce higher returns compared to lifetime plans. Expecting to live much longer than the statistical average is an essential thing to consider when purchasing a lifetime annuity. The disadvantage to you is that if you pass away before your annuity completes a payout you will lose the additional premium funds. Remember to ask if there is a “death benefit” before you purchase an annuity plan.
Rate returns can be affected by a variety of factors
Every insurance company offers their own rate, and how well these rates turn out will depend on a variety of factors. These factors may include the management overhead of the firm, the performance of their different investments, the number of clients they have and the overall performance of the business. When choosing a company to buy an annuity from, do not compromise on the credibility or reputation of the company.
If you begin to find that the contract is not functioning the way you thought it would, there are other options available
There are alternatives available if you decide that your annuity contract is not performing well. Annuity contracts purchased sometimes are the source of rewards to those that purchase them. This could be a good options; especially since you may have to pay high penalties for withdrawing your money before the date that you agreed to in your annuity contract.
Providing security for the future is the reason for purchasing a retirement annuity. Always keep this principle in mind so you will be able choose the best annuity contract for your needs.