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Thursday, May 19, 2011

What Are The Benefits Of Fixed Annuity

Buying annuities is a best decision taken by a retire. An annuity is an agreement that is signed between the insurance companies and the individuals. However, how much benefit you get to avail after the enrolment completely depends on the type of scheme that you choose. There are several types of annuities that the individuals get a chance to choose from. Some of them opt for fixed annuity whereas few go for variable annuity schemes. For the retires, well, the former option is considered to be an ideal one because of its numerous advantages.

Certain features of the fixed annuity have been mentioned below:

Once you get enrolled to this scheme, you are assured of getting guaranteed rate of return.

Until you start withdrawing your money after purchasing the scheme, you won’t have to pay any kind of tax as this scheme is completely tax-deferred.

This scheme offers secure principal unlike variable annuity. In case of the variable option, the principal fluctuates according to the income that you receive through other modes of earning.

The fixed annuity scheme offers an option of lifetime income. This means that an annuitant can get the earning for life.

When it comes to fixed annuities, it has been found that it is offered at a fixed rate till a specific period of time, which is less the contract term. With the help of the bailout provision, the rampant rise or fluctuation of the rate of interest is prohibited. It, in simple words, is a protection policy for the annuitants.

Analysing the fixed annuity schemes offered in the market will let you come across these features which will compel you to register for it.

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