|Over the past five years, there has been a significant increase in annuity sales to senior citizens. There continues to be confusion among consumers about annuities and some questionable sales practices. Here is some important information that will help you if you are considering purchasing an annuity.|
What is an Annuity?
An annuity is a contract in which an insurance company makes a series of income payments at regular intervals in return for a premium or premiums you have paid. Annuities are often bought for future retirement income.
Is an Annuity Right for You?
You should think about what your goals are for the money you may put into the annuity, as well as how much risk you are willing to take. Ask yourself the following questions:
|Types of Annuities|
|Review Your Contract Carefully|
As with any insurance product, always review the contract and be sure you understand the terms and conditions, as these will vary from contract to contract. Ask the agent and/or company for an explanation of anything you do not understand. Do this before any free look period ends. This period gives you a set number of days to look at the annuity contract after you buy it. If you decide during that time that you do not want the annuity, you can return the contract and get all your money back.
Tax Treatment of Annuities
You should consult a professional tax advisor to discuss your individual tax situation.
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