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Annuities. Good, Bad or just Ugly?


We are regularly asked if an Annuity is a good or bad thing for clients, and like most answers in our business and in life, the answer is, “It really depends!”

At its most basic level, an annuity is a life insurance product designed to pay some level of income to the annuitant.  The investor gives the annuity product life insurance company a certain amount of money, called the premium, and the life insurer agrees to pay the annuitant a certain amount.  These amounts can be monthly, quarterly, annually for life, for a certain minimum period or both.   This is an example of a fixed annuity.  There are also indexed and variable annuities where the value is tied to some kind of stock or bond investments.
There are literally thousands of different annuity products with thousands of variations.  As with any financial product, whether the product is appropriate for a particular client depends on exactly what the client’s needs, sophistication, financial situation and risk tolerance are.

They also typically have steep surrender charges if the annuity is cashed out before a certain length of time.
When considering whether an annuity product is good for your financial goals you should make sure that you fully understand the product and that it is offered by a financially stable and large life insurance company with a long history.
White House Financial & Settlement Consulting helps families live an easier and less stressful life through the proper management of their financial resources.  We do this by acting as our clients’ trusted advisor providing a personal touch customized to the client’s needs!  Please visit our web site at www.whitehousellc.com for more information!

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