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.
Rating agencies are independent, third-party companies that analyze and rate the financial health of many different types of organizations—including governments and entire countries.
Credit quality basically refers to overall financial health and the ability of a person or company to fulfill their financial obligations. In other words, can the person or company pay their bills.
It’s a Small World
Insurance companies or insurance “carriers” are the organizations that actually produce or manufacture annuities.
Similar to lead generation, free seminars and meals are essentially marketing tools that are intended to generate interest among prospective customers.
Marketing can prove valuable and informative. Much depends on the quality of the financial advisor—a knowledgeable advisor can lead a productive session.
Lead generation is a form of direct response marketing that is common in many fields of consumer finance. Lead generation companies attempt to obtain an expression of interest and personal information from consumers. Lead generation companies will then pass this information (the “lead”) to salespeople—often to the highest bidder or set of multiple bidders—who
