A good annuity plan offers more returns than the principal amount.
In addition, the rates of interest should be stable.
Furthermore, the annuity returns should be enough to cater for the basic lifestyle as well as a little luxury.
Plans are often bought from insurance companies.
Nevertheless, trust and charitable organizations can give the plans.
The signed contract between the insurance company and the policy/ contract holders stipulates the series of payments and the principal in addition to the annuity rate.
Enjoying long- term financial benefits: The interest rate is either fixed or variable.
The fixed annuity interest rate indicates that the amount of interest will remain constant despite the market fluctuations, while the variable interest rate implies that rate of interest is subject to market fluctuations.
An annuity plan is a flexible investment; policy/ contract holders can enjoy long- term financial benefits.
This is possible if they can decide on the ideal plan that caters for their needs and budget.
The annuity cost can be of substantial amount.
Nevertheless, an individual can save much more if they can conduct an effective annuity rates comparison.
The comparisons can be performed offline or online.
There are many insurance companies that give different plans to cater for different customer needs.
Conducting an annuity rates comparison gives you an opportunity of finding the right policy while saving more money.
While undertaking the comparison, several factors need to be taken into consideration and among these include the rate of returns, the annuity period, payments, and tax status and payment mode.
· Rate of Return: A plan could either assume a fixed or variable perspective.
The insured can choose depending on their preferences.
· Annuity period: The annuity period assumes either a lifetime or fixed period.
The lifetime annuity implies that the payment is undertaken throughout the remaining lifetime of the contract holder.
Meanwhile, the fixed annuity means payments are to be undertaken at a stipulated time period.
· Payments: The annuity payouts are either immediate or deferred.
The immediate annuity means that the payment will begin once the annuity plan has been purchased.
Meanwhile, the deferred annuity means that the payout begins at a later date as stipulated on the contract.
· Tax status: Annuity plans feature either a non- qualified or qualified tax status.
The non- qualified tax status mean the plan is taxable.
Qualified tax status implies that the annuity plan is not-taxable for the year the annuity plan was paid.
· Payment mode: The mode of payments fall in two categories; namely the flexible premium and single premium annuity plans.