Finding The Best Annuity Rates With Independent Financial Advice
Finding The Best Annuity Rates With Independent Financial Advice
There are no rules which say that there is something like the best annuity rates. Most people would like to be told this is the best and this is the worst, and then they will be certain. Unfortunately, finance does not work that way. What is the best for one person does not have to be good for another. You will inevitably have to go shopping to find the best rates for yourself, so the only way to get it right is to have a bit of understanding what to look for when shopping.
Finding the best annuity rates will depend a lot on which type of annuities you are looking to buy, but basically all annuities are the same in essence. An annuity is a contract with an insurance company, no matter if you are looking for pension annuities, life-time insurances or any other type of annuities available on the market. You agree that you will pay a certain premium to the company and continue to receive periodic payments throughout a specified time period.
There are basically four types of annuity return rates that you should look for when buying annuities. There are fixed, variable, immediate and deferred annuities. While these are just the basic divisions, with basic knowledge on each of them, you should have no problem in finding the best annuity rates for you because these differences matter the most in defining your return rates.
Fixed rates are considered to be safer and they offer lower rates to compensate for the ratio of risk and return. Low risk brings low return here, just like with any other investment. They can change, but this is set to increase after a few years, depending on the contract, so they keep pace with inflation. In other words, only the number changes and their worth remains the same.
Variable rates, on the other hand, are tied to mutual funds and their return rates are tied to the condition of the market they are in. They can offer better rates, but these also have additional charges, because the accounts with variable rates are harder to manage than the ones with fixed rates. Many people dislike variable annuities because they are very complicated.
Deferred annuities are also not very popular, but there are a few situations where specialists can decide that these are the best option for a person. With these annuities, there is a delay in time from the premium payment and the first payment you receive from the company. Immediate annuities bring payments immediately and proceed in an agreed frequency. All these options can influence the rates which you will receive on your paychecks.
This does not meant that only fixed annuities offer the best annuity rates in the world, just because the rest are more complicated. These types of annuities are only a vague picture of the most common annuity types which all bring different returns in different personal situations. To find the best annuity rates, you must find the best annuity for your circumstances. Consulting with a specialist in annuities is not something that can be avoided.
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