An annuity is a long term investment. You pay a fixed sum of money to an insurance company which becomes your asset. This asset, in the long run, will provide you income for your retirement. What you contribute are then converted into periodic payments.
How an Annuity Works?
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Most people buy annuities because of three things. First, is for the periodic payment you can. This payout is a retirement plan for the rest of your life or of your spouse. If you die, your beneficiaries could also get death benefits. And lastly, you don’t pay taxes on the income from your annuity unless you withdraw the money.
You can buy an annuity either in a single payment or a series of payments. Likewise, you can get your cash either as one lump-sum or set of payments over time. You buy an annuity by making either a single payment or a series of payments. Similarly, your payout may come either as one lump-sum payment or as a series over time.
There are also several types of annuity depending on your situation. Whether your needs are immediate or long-term, there is one that can work for you.
With fixed annuities, fixed payments are made. The principal investment and income are both guaranteed by your insurance company. In a variable annuity, you can how much financing you want to put in. Your income will meanwhile depend on how those investments perform.
Then there is also immediate annuity, which is paid instantly. The investor pays a lump-sum, and guaranteed income starts almost immediately. It is usual for medical purposes.
Annuities can also be used for long-term health care. With this type of annuity, you get full control over your money at the same time, getting long-term care coverage in place. If you have not used the benefit, you will still have 100% access to your money.
To get the best advice about annuity, contact the experts from Korthase Insurance in Hilton Head, SC. We deliver top service with quality attention and the most appropriate, appropriately priced insurance product.