Insurance Annuity | Annuities

Posts tagged "insurance annuity"

Should You Annuitize your Insurance Annuity?

What does it mean? Put simply, to annuitize is to start taking payments from an insurance annuity that may have been accumulating for some time. Specifically, you “trade” the accumulated annuity balance for a stream of payments over a specific term of years or life (a life annuity). An annuity, a policy that is paid into either by lump some or regular payments by the policyholder, and gains value via investment of those funds by the insurance company that holds the policy, in a manner agreed between the two parties, has many terms attached when it is created, and there may be an option to annuitize at a certain point or date set at the start of the insurance annuity agreement. What happens when I annuitize? When, and how, the policy becomes annuitized is determined by the rules and terms that are agreed by the policyholder with the insurance company, and these can be varied and dependent on many different factors. If the policy has a number of different options at which annuitization can take place, then it is up to the policyholder to decide what is best for him or her. In many cases, if the insurance company does not hear [...]

How Liquid is your Insurance Annuity

Retirees often want to know how quickly they can get to their money in case they need to cover extraordinary expenses such as a medical emergency, or a home or auto repair. This need for liquidity may cause them to avoid and insurance annuity. However, when you look closely, you will see that insurance annuities can possibly provide access to funds that can accommodate many circumstances. For instance, what if you need to take out money before the insurance annuity matures? Most annuity companies will let you remove a portion of your account’s value each year without paying a withdrawal charge. This is usually 10%, and once the surrender charge period expires, you will be able to withdraw as much as you want without paying any penalties to the issuer. But an insurance also can allow for other circumstances. Suppose you are worried about money for future long-term care or a medical emergency. Some annuity companies will give you penalty-free access to your funds if you have to go to a nursing home or come down with a critical illness. And what about income? If your situation changes and you need income from your insurance annuity, you will have the [...]