Category Archives: Annuities

Pros and Cons of Annuity Investing

Posted by on August 30, 2010 Comments Off

Annuities are a very interesting investment option that has increased in popularity recently with the volatility of the stock and bond markets. Annuities are a great investment for some people, but not so great for others. How do you know if they are right for you? Here is a pro and con list of annuities so you can decide whether or not they are right for your portfolio.

Pros

Tax deferred. The primary benefit of investing in annuities is that annuities grow on a tax deferred basis. What this means is that no matter how well your annuity performs, and no matter how much money you make with it you will not pay taxes until you begin to receive annuity payments, and even then you are only taxed on the interest portion of your payment.

Guaranteed rate of return. One of the biggest draws for annuities, especially in this turbulent economy, is the fact that for many fixed annuities the rate of return is guaranteed over a set number of years. Even though it isn’t a large rate of return many investors close to retirement appreciate the low risk that fixed annuities provide. (It should be noted that variable annuities do not provide guaranteed rates of return.)

Payments for life. One of my personal favorite parts of annuity investing is that even if you outlive your initial contribution amount, the annuity provider will continue to make regular payments until you eventually pass away. This is a great way to insure that your golden years are taken care of since other investments like mutual funds eventually dry up if you live longer than anticipated. With annuities you keep living and they keep paying.

Cons

Fees can be high. One of the drawbacks to annuity investing is that fees tend to be higher than other investment options such as mutual funds. Some annuity providers may charge fees that exceed your potential tax savings, so it is important to analyze any annuity you may invest in to be sure you are maximizing your retirement investment.

Not very liquid. Another drawback is that annuities are not a very liquid investment. Similar to certificates of deposit if you need to withdraw funds from your investment you may be subject to a surrender charge that can be significant at times. Usually annuity companies start the surrender charge high and decrease it as time goes on. If you think you may need the funds somewhere down the line you may want to look elsewhere.

Sell Annuity Rights

Posted by on July 26, 2010 Comments Off

There are points in life wherein we can experience severe financial problems and it seems like we can’t do anything to solve it. Although it is made known that there can be situations like this, but what if we are not prepared? This is the main rationale behind getting financial security insurance. Security in love is through marriage, security in homes using locks and alarms and financial security for life through guaranteed stream of income or in sell annuity.

We can do things to make our life financially secured through getting insurances and pensions but we can also secure more money at hand through properties selling and investments such as annuity. To sell annuity rights is a bit of a difficult process and it needs to be well planned and decided. If you think you are not ready yet to give up with your annuity, then don’t force yourself once transferred, it will never be yours again unless the buyer sells it back to you but this is barely possible.

If we desire to have a stable income for life, we humans also desire for a much more return investment. This is why, some take the risk to sell annuity for they expect a huge amount of lump sum money whenever successful. Thus, annuity cash out is done for a higher rate return and to solve financial problems.

However, there are also instances that to sell annuity wouldn’t work or wouldn’t help that big, particularly to urgent need of money. Why is that so? Well, annuity selling somehow takes some time before the process ends so if your liquidity problem is kind of urgent, then selling may not be the best thing you can do.

In addition, can you tell that it is the right time to sell your annuity in the market? If you gain more, then better but what if you lose a considerable amount? Sell annuity issues can be tough, so it is always advised to seek professional help first so you will be getting the most from your money’s worth.

Annuity Appointments- Good or Bad?

Posted by on July 21, 2010 Comments Off

It’s hard being an annuity agent today. With the recent economic difficulties, almost everyone is struggling to become financially secured. Businessmen think of some innovative ways to improve their sales, whether changing management strategies or creating some new products. If you are a new agent, finding clients can be tough. It seems like most of them don’t want to be part from their money, they are afraid to start an investment because they are afraid of losing it and they even forget the word trust. So, as an agent, how are you going to address this issue? Are you familiar with annuity appointments? This might help you out.

There can be ways to help you make good sales despite of the situation. There are parties out there that would cater your need. They are asking a part of your money once you succeed in luring clients to buy settlements but not  that big. One of the most popular answers to your problem is the use of annuity appointments.

Annuity appointments are one-on-one appointments by agents to their prospect clients, apparently to transact about selling an annuity. This sales strategy is very ideal for agents who desperately need clients and telemarketing companies really try their best to site prospects.

The annuity appointments process begins when a postcard is being sent to the prospect client. The prospect then sends back his reply and that is the time for the telemarketers to start planning for the appointment. The prospective “customers” will often turn out to be the aged or people who are still earning and they don’t need or desire to buy.

Annuity appointments are simple ways that enables annuity agents to do a lot of work, expecting for a little reward or no reward at all. Then, the agent will typically have to spend hundreds, if not thousands or dollars in the “marketing” companies just to complete the appointments. So in the end, the annuity agents will be losing both, money and time. Thus, annuity appointment is both helpful and harmful.