Information About Deferred Annuity And Annuity Rate

By Author: Mike Anderson
Total Articles: 32
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Today, you may have a very good income to support you family expenditure but when you retire the pension you get is not sufficient enough and therefore there is a need for some additional income to support your expenses. You can get this additional income by investing in annuities. There are different types of annuities but here we shall discuss about Deferred Annuity.

Deferred Annuity can be defined as an agreement in which the payments are delayed until the investor chooses to receive them. In Deferred Annuity there are usually two phases: first is the accumulation phase in which you will have to invest money into the account and the second is the payout phase in which you receive payments. There are three types of Deferred Annuity, they are:

1.Fixed Deferred Annuity- It can be explained as a product which helps you to collect funds for your retirement. It provides a fixed rate of interest and the money in Deferred Annuity accumulates on tax-deferred basis.

2.Variable Deferred Annuity- In this the money is invested in the stock market, other securities ...
... like bonds, money market and the annuitant receives tax advantages.

3.Equity Index Deferred Annuity- In this interest on investment is earned on the basis of the performance of the stock market and it ensures that the value of the principal investment does not go down.

There are many types of annuities available in the market today but it is necessary to compare the Annuity Rate to know which type of annuity is the most suitable for you. Annuity Rate is very important as they have the potential to determine how much amount you can receive in return of your investment. They help you to know the highest income you can receive post retirement.

It is important to compare the Annuity Rate because the annuities are long term in nature. Another benefit of comparing Annuity Rate is that you will be able to choose the best annuity provider. Actually, post retirement people have to suffer financial crisis and investment decisions are really sensitive because the investor’s life after retirement depends on this decision. Therefore, it is better to compare the Annuity Rate and then choose the annuity provider who offers the best deal. You may also seek help from annuity consultants as they can guide you properly and help you make the right choice.

Thus, before buying Deferred Annuity or any other type of annuity it is advisable to compare Annuity Rate.