Banks offer a variety of ways to save money. Annuities have been one of the most popular investment alternatives for a variety of reasons. This page offers essential annuity information and explains why banks offer annuities.
Annuities - Advantages and Disadvantages of Annuities
An annuity is a contract between the buyer and an insurance company. In general, the insurance company promises to do something with the buyer’s money. This page should serve as a general overview of annuities. After you understand the concept you can look into the various annuity types.
The Variable Annuity
A variable annuity is an annuity with exposure to investments. If a fixed annuity pays a fixed rate of return, a variable annuity pays a variable rate of return. Before making a final decision for or against a variable annuity, you should understand how they work.
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Thursday, October 15, 2009
Annuities & Pensions Insurance Center
What is an annuity?
Basically, an annuity is just a series or stream of payments. “Annuity” comes from the Latin for “year”. In the context of life insurance, it is a contract between you and an insurance company under which the insurance company pays you money for a stipulated period — often for life. The payments are frequently monthly. The person receiving the payments is referred to as an “annuitant.”
Risk and annuities
In a sense, an annuity is the reverse of a life insurance policy. Life insurance insures you against the risk of your dying too soon, but an annuity protects you against the risk of your living too long (which could result in your money running out while you are still alive). In a life insurance contract, there is a risk to the insurance company that the insured person may die earlier than expected; thus requiring the company to pay out money sooner than it planned. In the case of an annuity, the major risk to the insurance company is that the person may live a very long life — requiring more payments than the insurance company expected. Another risk is that the company may not be able to earn as great a return on its investments as planned, and so it may have less money to make payments when they are due. It is wise to buy an annuity only from a financially strong insurance company. Such a company is more likely to be able to pay its obligations. As with life insurance, the risk of annuities is spread over many people who have such contracts. This makes it easier for the insurance company to predict its risk.
Why have annuities become so popular as an investment in recent years?
Primarily, because of the possibility of tax deferral. After the tax law changes of recent years eliminated some other options, annuities are one of the few remaining ways to defer income tax on the growth of your investments.
Basically, an annuity is just a series or stream of payments. “Annuity” comes from the Latin for “year”. In the context of life insurance, it is a contract between you and an insurance company under which the insurance company pays you money for a stipulated period — often for life. The payments are frequently monthly. The person receiving the payments is referred to as an “annuitant.”
Risk and annuities
In a sense, an annuity is the reverse of a life insurance policy. Life insurance insures you against the risk of your dying too soon, but an annuity protects you against the risk of your living too long (which could result in your money running out while you are still alive). In a life insurance contract, there is a risk to the insurance company that the insured person may die earlier than expected; thus requiring the company to pay out money sooner than it planned. In the case of an annuity, the major risk to the insurance company is that the person may live a very long life — requiring more payments than the insurance company expected. Another risk is that the company may not be able to earn as great a return on its investments as planned, and so it may have less money to make payments when they are due. It is wise to buy an annuity only from a financially strong insurance company. Such a company is more likely to be able to pay its obligations. As with life insurance, the risk of annuities is spread over many people who have such contracts. This makes it easier for the insurance company to predict its risk.
Why have annuities become so popular as an investment in recent years?
Primarily, because of the possibility of tax deferral. After the tax law changes of recent years eliminated some other options, annuities are one of the few remaining ways to defer income tax on the growth of your investments.
Insurance Agency
Agency is an area of commercial law dealing with a contractual or quasi-contractual tripartite, or non-contractual set of relationships when an agent is authorized to act on behalf of another (called the Principal) to create a legal relationship with a Third Party. Succinctly, it may be referred to as the relationship between a principal and an agent whereby the principal, expressly or impliedly, authorizes the agent to work under his control and on his behalf. The agent is, thus, required to negotiate on behalf of the principal or bring him and third parties into contractual relationship. This branch of law separates and regulates the relationships between:
• Agents and Principals;
• Agents and the Third Parties with whom they deal on their Principals' behalf; and
• Principals and the Third Parties when the Agents purport to deal on their behalf.
The common law principle in operation is usually represented in the Latin phrase, qui facit per alium, facit per se, i.e. the one who acts through another, acts in his or her own interests and it is a parallel concept to vicarious liability and strict liability in which one person is held liable in Criminal law or Tort for the acts or omissions of another.
• Agents and Principals;
• Agents and the Third Parties with whom they deal on their Principals' behalf; and
• Principals and the Third Parties when the Agents purport to deal on their behalf.
The common law principle in operation is usually represented in the Latin phrase, qui facit per alium, facit per se, i.e. the one who acts through another, acts in his or her own interests and it is a parallel concept to vicarious liability and strict liability in which one person is held liable in Criminal law or Tort for the acts or omissions of another.
Insurance Affiliate Programs
Insurance affiliates generally do very well. Operators on the insurance market thrive on credibility, and this culture tends to spill over in no-nonsense insurance affiliate programs.
There are a lot of strong operators in the insurance niche, from insurance brokers to big insurance companies selling their own policies.
Insurance affiliates often work with generating requests for insurance quotes, getting paid a CPA for each completed request. Commissions on insurance policy sales are also sometimes available for ambitious affiliates, often coupled with very tempting volume increments!
There are a lot of strong operators in the insurance niche, from insurance brokers to big insurance companies selling their own policies.
Insurance affiliates often work with generating requests for insurance quotes, getting paid a CPA for each completed request. Commissions on insurance policy sales are also sometimes available for ambitious affiliates, often coupled with very tempting volume increments!
Healthcare abroad
Whatever your reasons for going abroad, you may be entitled to medical care at reduced cost or sometimes free. Your entitlement will vary based on whether you're going to an European Economic Area country (EEA) or elsewhere in the world.
If you're going on a holiday or a business trip, you should apply for a free European Health Insurance Card (EHIC), which offers you access to reduced-cost medical treatment.
Go to About the EHIC for more information on how to access healthcare abroad.
We offer a full range of worldwide health insurance plans and whether you are looking for individual, family, group or company cover, we have an international medical insurance plan to suit your requirements. Goodhealth makes sure you have access to the finest medical facilities worldwide, enabling you to obtain the best possible treatment whenever and wherever you need it.
As experienced specialists in international health insurance, we understand that, living abroad, expatriates require comprehensive worldwide medical insurance. Our international travel medical insurance plans ensure you are not faced with large medical bills, and provide a valuable range of additional international healthcare services.
If you're going on a holiday or a business trip, you should apply for a free European Health Insurance Card (EHIC), which offers you access to reduced-cost medical treatment.
Go to About the EHIC for more information on how to access healthcare abroad.
We offer a full range of worldwide health insurance plans and whether you are looking for individual, family, group or company cover, we have an international medical insurance plan to suit your requirements. Goodhealth makes sure you have access to the finest medical facilities worldwide, enabling you to obtain the best possible treatment whenever and wherever you need it.
As experienced specialists in international health insurance, we understand that, living abroad, expatriates require comprehensive worldwide medical insurance. Our international travel medical insurance plans ensure you are not faced with large medical bills, and provide a valuable range of additional international healthcare services.
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