Annuities are Insurance
Here is a bit of advice that might make annuities easier to understand:
Glossary:
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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.
Personal Retirement Manager Exchange Program Opportunity
Submitted by tom on
The Hartford Financial Services Group has apparently sent a letter directly to annuity owners informing them of the "opportunity" to trade their older variable annuity contracts for new and repriced variable annuities.
Some industry observers consider the letter and offer self-serving at best. Apparently many of the older contracts contain the type of impossibly rich benefits that created so much of the recent trouble at the Hartford.
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What is an Annuity
An annuity is a financial product that converts accumulated savings into guaranteed income. In a very basic sense, annuities:
- Turn a sum of money into a series of payments or a “stream of income.”
- Guarantee the stream of income over a specific timeframe.
From The Publisher
This buying guide is intended to provide objective and actionable information for “consumers” or the people who might actually consider the purchase of an annuity.
For those with neither the time nor the desire to browse through this buying guide, the following are some simple points to consider:
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Getting Started
Start with the Basics
Annuities can be complex, and it is easy to get bogged-down in product details that are difficult to understand.
