Basics of Investing

Archive for April, 2010

Question: Are annuities safe for seniors?

Annuities sound so complicated. Are they a good investment choice for seniors who need little risk?

Answer: The answer is definitely yes. Or you can take your chances in the market where seniors have lost billions over the last decade. Many who could not afford to lose. In reality fixed annuity accounts work a lot like cd’s.

Fact – Fixed, fixed-indexed and immediate annuities are all insured. They are backed by the full faith of the highly regulated insurance company of your choice AND the Insurance Guaranty Association in your particular state. They are usually insured up to $100,000 per contract and $300,000 per household.

Fact – You have access to your money during the term of the annuity – usually interest and principal or for long term health care expenses. Some annuities allow for return of premium at any point during the annuity term as well. That is to say, you can get all of your investment back if you surrender the account early.

Fact – After the term is up, you can move your money (penalty free) anywhere you want.

Fact – They do not enrich the agents and the insurance companies anymore than do other financial instruments being sold. These wall street types act like they work for free.

Annuities are safe, insured and a good investment for risk averse seniors. Annuity terms can be as little as 1 year, but you will receive your best interest rates for 3 years or longer.

http://www.CaliforniaAnnuityFAQ.com – COMMENTARY: ‘Safe’ Investments – How Risky Are They?