Annuity

An annuity comes in many forms, but a simple definition is that an annuity is a contract that converts a sum of money into a series of periodic payments for an agreed upon period of time. An annuity can be thought of as a financial vehicle that converts a pool of money into a stream of income. Annuities are most useful in addressing the financial planning needs of people in or approaching retirement. Annuities are unique in the financial world because they can provide protection against the risk or outliving one’s assets (longevity risk) by guaranteeing income payments in perpetuity or any other selected amount of time. Annuities can be viewed as a type of personal pension plan. Social Security is similar to an annuity in that money contributed over the course of one’s working years is converted into a series of periodic payments that provide income during retirement.

Longevity Insurance Creates Spending and Investment Flexibility for Retirees

One in three baby boomers is expected to live into their nineties. Longevity risk or the possibility of outliving one's assets is something that should be considered by all near and current retirees. Longevity insurance or a longevity annuity is one of the most efficient ways to hedge longevity risk. Relatively large amounts of guaranteed income later in life can provide peace-of-mind and financial flexibility earlier in retirement. "Because the insurance company has held your money for a long...

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Advanced Life Deferred Annuity

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Retirement

Longevity Insurance

Income Annuity

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Advanced Life Deferred Annuity

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Retirement

Longevity Insurance

Income Annuity

TARP Funds Likely Extended to Certain Life Insurers

The U.S. Treasury Department is expected to annouce that TARP funds will be extended to certain life insurers that have bank holding or thrift status. The potential TARP funds are seen as most beneficial for those life insurers whose capital bases have suffered most during the financial crisis. Strengthened capital bases are likely a positive for consumers of life and annuity products, while industry shareholders and executives would suffer from dilution of their ownership and increased...

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The Vast Majority of Variable Annuities Sold in 2008 Include Some Form of Guaranteed Living Benefit (GLB)

Guaranteed living benefits ( GLB ) are optional guarantees that can be embedded into variable annuity products. A recent variable annuity survey from the actuarial and consulting firm Milliman indicates that GLBs have experienced rapid growth consumer adoption over the past several years. 96% of variable annuity sales in 2007 and the first half of 2008 included some form of GLB. "Sales of VAs that offered a GLB during calendar year 2004 averaged 87% of total VA sales, increasing to 95% in 2005...

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Annuity

Consumer

Guaranteed Living Benefit

Living Benefits

Variable Annuity

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Annuity Sales

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Annuity

Consumer

Guaranteed Living Benefit

Living Benefits

Variable Annuity

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Annuity Sales

Immediate Annuities are a Critical Aspect of Retirement Planning

Article discusses the importance of immediate annuities--particularly in light of hedging longevity risk . Pros and cons of immediate annuities relative to other forms such as variable and indexed annuities are addressed. A solid article written by an attorney that is likely focused more on an advisor than a consumer audience. "The retirement crisis facing our country for the next 15 years is profound. The Social Security system is under great pressure, lifetime pensions guaranteed by employers...

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Retirement Crisis Brewing with Lump Sum Distributions of 401(k) Plans

"Unlike traditional pensions, which provide participants with a steady stream of income for as long as they live, 401(k) plans generally pay out benefits as lump sums. Lump-sum payments mean that retirees have to decide how much to withdraw each year. That's really hard to do, because people don't know how long they are going to live. If they live longer than expected, they face the horrible prospect of running out of money in old age...The way to have the highest standard of living in...

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