Oncken Insurance Agency, P.C. Blog
Welcome to adulthood, there are bills to pay and responsibilities to keep. Now, don’t worry, it’s not all bad. It’s just a part of life. The cool thing about some of the things you pay for as an adult is the benefits you get in the future. For example, if you find yourself in an accident, your insurance should cover that. Something similar is an annuity, which you will know more about in this article, so let’s start.
What is an Annuity?
SO it is a contract between you and your insurance company. You pay them a certain amount, and in time they will be giving you a payout. That is the quick explanation, but it is more flexible than that. So, to get a clearer understanding it’s like social security, you pay a small amount, and when you are older, you get a pension.
Now, an annuity can be paid in many ways, it can be monthly, quarterly annually, or a single lump sum. From there at a certain specified instance, like when you reach a certain age, for example, you receive regular disbursements of income. You can also choose to receive it immediately, also known as an immediate annuity.
Why do You Need an Annuity?
It isn’t that you need an annuity, but what you get from one. You are allowing yourself an extra fixed income by making a payout now. Of course, this is the case for when you choose to get your payouts in the future. Although one does get a pension from Social Security, an added income can be very helpful. Plus, depending on the type of deal, you can get potentially bigger payouts.
What are the Types of Annuities?
Well, the first of the three types is a Fixed Annuity. AS the name suggests, you get a specific amount paid out to you based on your balance. The perk of this is that you know what you are getting, it is fixed after all. The problem is, you are going to get a more modest amount compared to the others.
A variable annuity will have you choosing from investment options which will be placed in a sub-account for you. The risk here is that your payout will depend on the performance of your sub-account. The Indexed annuity is a blend of the first two where you get a fixed amount, but a portion will depend on the performance of the sub-account.
Those are just the basics of annuities if you need more information to be sure to check our site for more content.
At Oncken Insurance Agency, we aim to provide comprehensive insurance policies that make your life easier. We want to help you get the insurance that fits your needs. You can get more information about our products and services by calling our agency at (281) 256-8310. Get your free quote today by CLICKING HERE.