As the economy struggles through the recessions and financial difficulties, it’s no wonder that many U.S. investors are becoming a little hesitant. This is for the reason that retirement income funds and account assets mislaid about 32 percent or $2.8 trillion of their worth between September of 2007 and December of 2008. Thus, many taxpayers are full of investing uncertainties.
In this date and time, consumers are not certain where to go for an essentially steady retirement investment. There are many people trying to find out if insurance products such as annuity investments are a safe alternative in this era, particularly as they observe and watch some of the major insurance providers struggle.
Many skilled financial professionals as well as insurance agents are quick to guarantee that their offerings are still safe and even provide an affirmative response if you ask the question: Are annuities a good investment?
This article will present you information concerning insurance products, specifically fixed annuities, and let you recognize if they are a safe bet in a financially-challenged market.
When matched against brokerage firms and banks, insurance firms come with a track record of stability. For the most part, this is brought about by insurance companies that furnish conservative investment choices that bear very little market risk.
Insurance companies had gone a long way and survived economic depressions, times of war, industry scandals, government failures, and even perilous stock market instability. During rough times, Americans kept their homes, life, health, businesses, and cars safely insured with these providers.
Annuities investments are known as secure assets. Every investment product presented by an insurance provider is accepted and approved by the state Insurance Commissioner. This warrants that the products being offered have the utmost stability for consumers. This also steers clear of insurance firm failures.
You’ve definitely heard several bad news involving a few large insurance companies facing problems during tough economic times. Even if you’re a policyholder, you should not get frustrated since insurance company meltdowns allow the state Insurance Commissioner to take appropriate action. The commissioner aids in paying for rehabilitation and liquidation or mergers of failed insurance firms. Insurance Commissioners have the power to levy fees on some insurance providers doing business within their state – meaning your investment is fully protected. And for many years now, the security has proven to be exceptionally efficient.
Annuity Rate of Return
A structured settlement investment advice will let you know that fixed annuities have guaranteed minimum interest rate, thus they are very enticing to apprehensive and novice investors. Index-linked annuities are safe as well. They grant you the opportunity to generate more money if the market-linked index ascends. And when the market goes down, your annuity is assured not to lose value, which is a real relief.
The following are some of the advantages associated when you buy annuities:
- In many states, protection from creditors in eligible plans
- Deferred income tax until distribution or withdrawal
- Penalty-free distributions to cover emergency situations
- Complete authority over your funds if conditions change
- Probate-free transfers in time of death
- The ability to convert to a fail-safe lifetime income
Dispelling the Annuity Myths
Regrettably, fixed annuities especially those index-linked annuities established a bad reputation in the past years. Many believe that the nasty rumors are brought up by stock brokers since the investors are lured away from mutual funds, which are the products that they market.
The best part is that fixed annuities remain extremely safe.
An annuity advice will let you realize that insurance products give out the ultimate protection during tumultuous economic circumstances. While several market investments resulted to huge financial losses due to the current recession, fixed annuities stayed loss-free. These assets continue to make guaranteed minimum rate of return for annuity holders and expected to pay extra interest rate once the market gets back on its feet.
Things to Remember
You’ll not instantly become wealthy with annuity investments, which may encourage you to sell your annuity when you need access to your money to cover emergency expenses. But, if you don’t need your money immediately, the best feature of this investment is that it has the ability to eliminate major financial losses by helping you regulate your everyday expenditure.
Remember that in today’s market, keeping your nest egg safe is the chief key to comfy and happy retirement.