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What are annuities?

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what are annuities? what is the difference between Life Insurance and Annuities?What is the life cycle of Life Insurance?

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  1. An annuity can be a form of life insurance and is regulated as such.  You give an insurance company something of value, like the cash value of a whole life policy, or a big check, and they promise to send you a monthly check from the start of payout to the end of your life.  The amount that they pay depends on your age now, how much you give them, and when you want payments to start.


  2. Life Insurance

    Be ready for anything - the unexpected and the inevitable.

    Life Insurance protects your family from financial loss in the event of your death.

    It is an insurance company's promise to pay your beneficiary a specific amount of money when you die in exchange for timely payment of premiums.

    Annuities

    Sometimes described as the opposite of Life Insurance, annuities protect you against the possibility of outliving your financial resources.

    An annuity is a contract under which an insurance company promises to make a series of payments to a person in exchange for a single premium or a series of premiums.

    So Life - you get one lump sum payment

    and annuity - you get several payments

  3. You have many questions my friend but I will attempt to answer and be brief.

    1) Annuities are Investment Instruments issued by Life Insurance Companies.  Annuities are vehicles (Cars) who's passengers are mutual funds.  Finally Annuities are Tax Deffered vehicles which can allow you money to grow faster because taxes aren't taken until you annuitize after 59.5.

    2) Life Insurance is not for investment purposes but for the protection of a family or business.  It is designed to provide money to those who remain after another's death to help them handle the finances that remain and still capture the dreams that have been placed in jeopardy because of a persons death.  Such as sending a child to college or payinf off a mortgage.  However, certain types of life insurance (VUL, WL, and UL) have an investment component that can provided you with a "tax free" return.  While Term insurance is renting a policy purchasing VUL, WL and UL is like owning a home.

    3) Answer 2 sort of answers this question but to make it clear.  There are type main catagories of life insurance.  They are Term (Temporary Insurance for a Temporary Need therefore 5 to 20 Years) and Permenent (Whole Life, Variable Universal Life and Universal Life - Lifetime Life Cycle).  Term seems to be less expensive but in the long term it can be most expensive.  Each has it's purpose and you should talk to someone who sells all the types because then you will know they are doing what's best for you and not pushing you into a product because that is all they sell.

    Best Company of the year in my book:

    New York Life ( They sell everything and their agents are the best trained in the industry.) Use them or a private broker who has access to everything.  

    Bad Company of the year in my book:

    Primerica ( They only sell term and will force you into that product and the people who sell them aren't professionals but part timers.
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