The system of annuity is actually quite ancient! It originally dates back to ancient Rome when citizens used to purchase annual contracts off the emperor by paying a lump sum. These men of Rome would then receive monthly income until they die. In fact, it also has a Vatican connection! (Which is very ironic to think of because did not the Roman soldiers arrest the messiah?) Anyways, an insurance service in Pennsylvania was the first to offer this scheme in 1912 to support ministers of the church. Coming to the present, the annuity insurance schemes offer fascinating retirement planning options. Several financial service providers such as banks and insurance companies offer these retirement plans.
Compare and choose
You would need to compare different plan features to find the best one in your unique circumstance. An excellent online annuity calculator serves best for comparison. Taking any financial decision requires careful planning to ensure future security and optimum returns. In addition, you should be careful to avoid tricky deals, which can be fraudulent even! Expect comprehensive assistance from an independent online financial consultant.
Always confirm whether the service works on the behalf of any third party annuity service. You can easily clarify all details from the legal declaration at your preferred website. A professional consultancy would definitely provide you with adequate verbal support over the telephone. However, before you get in touch, it is good to have clarity on the basic concept of annuities.
How it works?
The basic concept is very straightforward. You set up a given fund with a preferred provider. They freeze your funds for a certain period of time and circulate it in the market. When the freezing period is over, you are paid back your investment as a regular stream of monthly payments or as a lump sum, as per the conditions of your plan. Take a close look on the places where there can be an uncomfortable catch. For example, you should be able to choose a plan with convenient accumulation period. It is an illiquid phase, also called the surrender period. Now, it can stretch from some months to a decade! You have to decide wisely.
Talk with experts
Use the annuity calculator to decode the pros and cons of different offers in the market. Several factors are involved. You may want to change your current plan. In case, your investment with the current one is still in the surrender phase, you would have to pay a surrender penalty for touching the frozen amount. In fact, a plan may even totally prevent any withdrawals from the accumulated fund. Eligibilities for annuity schemes vary with similar criteria like insurance. For example, a smoker is eligible to greater annuity than a non smoker. One needs to decide a suitable payout option.
Obtaining a lump sum can be perfect for some individual, and not so good for others. Talking with an independent consultant is very helpful. Be clear about your financial planning and what do you expect to do in the future. An adept consultant would definitely guide you in the right direction.