Are you new to the annuity word? If so, there are a few things you need to learn before you get started with your investment.
There are a few different annuity types you need to learn about. Keep reading to learn what they are.
1. Fixed Deferred Annuity
Are you interested in putting your money in an investment long-term? If so, fixed deferred annuities are a great option.
These investments last over several years. Insurance companies often place these investments in long-term bonds. These longer timelines will provide a higher interest for your investment.
2. Immediate Annuity
Are you looking for a simple investment? An immediate annuity is as simple as it gets.
To take advantage of these investments, all you need to do is give a lump sum payment to an insurance company. Once you do this, you’ll get a fixed amount of money paid back to you over time. You can spread these payments out over your whole life or over a smaller amount of time.
3. Fixed Annuity
A fixed annuity works in a way similar to a deferred annuity. The big difference is you can choose when you start receiving payments.
But with fixed annuities, you also need to be careful about when you decide to start receiving payments. You can face penalties if you choose to start withdrawing your money too soon.
- Variable Annuities
If you’re looking for a little variety in your investment, a variable annuity is where you should be looking. Other types of annuities tie their returns to a specific market. With a variable annuity, you can spread your risk across different investments.
Do Your Research Before Buying Annuities
Don’t jump into your investment before doing the proper research. Each type of annuity has its pros and cons. Make sure you understand them so you can make the best choice.