A life insurance annuity is a contract issued by an insurance company. It is a unique financial product that provides tax deferral of interest and capital gains and the option of a guaranteed monthly income for life.
Although annuities can serve various needs, the primary purpose of an annuity is that of a retirement vehicle for the annuitant, the person who will usually receive the annuity benefits.
The annuity is an attractive retirement vehicle because the money accumulating in an annuity grows on a tax deferred basis.
Annuities can get a lot of value when they are collected. There are different types of annuities: Fixed annuities, Variable annuities, and Equity Indexed annuities. A life insurance annuities quote will help in determining which policy fits an individual’s preference as to how payments will be made and how the benefits will be given.
Online life insurance annuities quotes will help save time and money by allowing the buyer to compare different policies from different companies. Some websites even offer a life insurance annuities quotes comparison, this will help in searching for different policies in just one click.
Some insurance companies would give instant life insurance annuities quotes without asking the awkward questions. Information may be asked for other bigger quotes such as a family life insurance quote.
The capacity of the buyer to pay must also be determined so that he can be advised which policy best fits him. After accumulating money in an annuity, the annuitant is not required to relinquish control of his or her cash value and enter into the annuity distribution phase. The annuitant can simply cash out of his or her annuity.
There are two parts to an annuity: the accumulation phase and the distribution phase. During the accumulation phase, the fund grows tax deferred; it does not grow tax free.
Annuities can vary by payment mode and are available as “single premium” or “flexible premium. They also vary by timing of the annuity income and may be available as a “deferred annuity” or as an “immediate annuity”.
The Distribution phase has two payout methods. First, the buyer can either choose to receive the money as a lump sum or he can choose a systematic withdrawal plan. Second, he can purchase an annuity payout plan, or annuitize.
All the details of annuity plans are provided in a life insurance annuities quote. The buyer has different options with each quote. The details will then be finalized in the life insurance policy chosen by the buyer.