Structured-Settlements
Fixed Annuities
The concept of fixed annuities is based on you giving a sum of money to an insurance company and in exchange you are promised a fixed monthly amount for a particular period of time. The period of time may be either a fixed period or for your entire lifetime. Generally speaking, fixed annuities allow you to concert a lump sum amount into a regular stream of money, or source of income.
Once a fixed period has been chosen, annuities continue to pay until the selected period, either to the original investor or to the investor's designated heirs. One can also alternatively choose to annuities, making the payments continue for a variable period, till the investor's death. In case of annualized investors, the insurance company pays nothing further after the investor's death, no matter how many monthly payments have been made.
Fixed annuities usually allow you at least some access to your investment. You can for example, make a withdrawal of interest up to 10 % of the principal annually. Annuities may also come with certain clauses that allow you to withdraw the investment with no surrender charge. Annihilation works well for retirees. As a matter of fact, fixed annuities are a kind of reverse insurance policies. Even though a life insurance contract may offer protection against premature death, the annuity contract offers protection for people, who fear outliving a hard-earned lump sum amount. In fact this is one of the reasons for which annuities came into being, to offer optimum protection against longevity.
Fixed annuities also offer the advantages of making your money really "safe." No longer do you need to worry about someone able to steal your capital away from you and at the same time you are offered the advantage of generating monthly income. Not to forget, the world-over, giving our capital to an insurance company for management, is still an attractive option.
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Elizabeth Morgan
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