Facts And Features Of Annuities: Part 1, Index Annuities
September 17, 2019 by Bob David
Over the last few years, fixed index annuities have risen in popularity. These products are used in a number of cases, but many of them have added optional features or riders that have helped their popularity and usefulness for those entering or in retirement.
The feature many people want from an annuity is a lifetime income stream without direct market risk. Older generations relied on pensions, which are being offered less and less, to provide similar lifelong financial security of the retiree, but with a reduced survivor’s benefit for the spouse. Annuities can provide lifetime income for the retiree and continue that income to the surviving spouse with no reduction or change, if properly designed.
In my opinion, there is a great deal of misunderstanding regarding annuities; they no longer represent the basic concept of giving your money to an insurance company for just the benefit of the annuitant. Fast forward to today and now we see how annuity contracts have evolved, making them much more flexible than in the past.
For example, a contract owner can typically withdraw up to 10% of the original principal premium annually with no surrender penalties. This helps toward accessing necessary funds in case of a financial emergency. With the passage of enough time, annuity contracts can also be surrendered with no surrender penalties being applied after the surrender period has been satisfied.
Click HERE to read the full story via Forbes.
