Those seeking the very best fixed annuity available needs to look towards one that serve your needs in the best manner. Not every individual that opts to purchase an annuity wishes to use the money immediately. In this particular case, an anuity can be considered a deferred annuity. Others that absorb the money immediately to use their annuity for immediate purposes as companies will vary the amount of interest they receive. This is done when they offer the product. In general, outcomes will vary based on whether one opts to take it immediately or defer the payment. That is why it is best to seek an annuity that is best for the situation.
The rate is not the only important factor. Also important is the length of time that you will receive the rate. How long is the rate locked in for? With this high rate, is a bonus rate included where you will only receive a deposit and then the rate will drop dramatically? These things need to be investigated immediately when you are seeking the absolute best fixed annuity available.
All fixed annuities have a basement guaranteed rate. This rate is the lowest amount that the company pays, regardless of the rate conditions. While it might look ridiculously low in good times, often that rate is a huge incentive to add to the annuity when the rates drop dramatically everywhere else. At the time of writing this article, November 2009, the interest rate you can receive on the best fixed annuity can reach as high as 8%, a great offer compared to the low interest options of other safe investments in the marketplace.
When you need to find out if you can add the annuity later, you can do so later. This can occur when you seek a deferred annuity. There are companies that might allow one lump some and then you will be required to purchase another product later.
Annuities have other factors associated with them besides the rate. You need to look at these factors when separating the best particular annuity from a situation. The length of the surrender period is quite important. Those wishing to use the funds later can do so as long as they do not want to take annuity payments. You will eventually need to find out how soon the money will be accessible to you without a penalty.
Look to see if the annuity offers a fee free withdrawal privilege as various companies will offer a one time 10% withdrawal with no penalty and while other systems will be more liberal. When you find an annuity that comes with a high interest rate, you will discover they often come with longer surrender periods. The longer period is usually not helpful for those people nearing retirement. The exception to this would be a helpful free withdrawal that fits properly into their schedule. There are liberal ones that will allow 10% per year are decent but cumulative withdrawals. That means you will be allowed to remove 10%. Those that do not use it will discover it adds to the next year which is helpful.
Ask for a quote if you’re taking payments from the annuity. If you take a lifetime of payments that you can’t outlive, you need to remember that if you pass away, your payments stop. That means that if you put $ 100,000 into an annuity and took only one payment then passed away, the insurance company keeps the rest. One way to avoid this is to take a lower payment that guarantees a specific number of years of payments, a return of principal or adds a second person as an annuitant.
The best annuity for one person’s situation does not necessarily yield the best one for another person. That is why it is best to get several quotes while seeking the advice of a helpful annuity specialist.
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