The TV <span title="commercials....JGWentworh.....What">commercials....JGWentworh...</span> is an Annuity?.......?

Question

I see those commercials all the time I have always wandered what Annuity is. Thanks!!

Answer 1

it&#039;s a schedule of periodic payments.

for example, you could go to a financial services company and pay them $100,000 to get $4,000/year guaranteed for the next 20 years.  generally, buying an annuity is pretty dumb, but it&#039;s common to be awarded something like this in a lawsuit or something.

the company you mention will buy you out of that annuity - they might give you $30,000 in exchange for that $4,000/year for 20 years.

if you bothered to do the math on any of that, you&#039;ll see that annuities are a pretty dumb thing to buy.

Answer 2

Annuities are products that usually derive their income from some sort of insurance, they are basically a contract you buy for a large sum of money from a company that then promise to pay you back regular sums of money for a defined period, and often include a lump sum payout either at the end of the contract, or if you should die, to your heirs.  They are often marketed with the empty promise that you &quot;can&#039;t lose the money you invested!&quot;, but of course that&#039;s true if you let it sit and do nothing in a bank vault, too!

If you are 94 years old, they are a terrific way to gain a guaranteed income stream (even if you live to be 139), but for the vast majority of people they are a rip-off.  Agents LOVE to sell them because they pay tremendous commissions!