Annuities are some of the safest investments you can get. They are backed by the strength of the Insurance Company that issues the annuity. You would want to make sure that the Insurance Company is rated A or better by rating agencies. The biggest thing to determine is what your goal is for the investment, some offer greater principal growth potentials, others are geared to offer the highest income and still others are designed to offer the a combination of things such as Long Term Care funds as well as Income.
At our agency in California, we speak to the person to determine what they are hoping to achieve and then figure out what might help do that best. You'd want to contact an Independent Agent and do the same.
Fixed Annuities are very safe. Variable Annuities however are subject to stock market fluctuations.
Fixed Annuities offer Guarantees. For every contractual Guarantee that an Insurance Company makes (such as 3% Guaranteed for 5 years), must be backed by purchasing a mix of US Treasuries along with a small amount of various other investments. But mostly the Guarantees made by the Insurance Company are largely backed by the financial stability of US Treasuries (which are considered the safest investment class there is).
As pointed out already, the best way to judge the financial stability of an insurance company is by their Financial Ratings. In the investment world, And ratings that is a B++ or higher is considered "investment grade". Although as the term of the contract increases, your minimum acceptable Financial Rating should increase as well in my opinion. A longer time frame creates more risk. So for a 3 or 4 year Annuity a B++ Rating might be acceptable for some people. But for an Annuity that is 6 years or longer, it is highly recommended to use an "A" Rated Carrier.
Licensed Life Agent, Life and Finance/ 50 States, New York
All annuities are safe. Just that there are some differences in how they work. Most is according to the financial planning before they are bought. I work with Fixed, Immediate, and Deferred Annuities. Each has its use and options. An experienced consultant will show you how to use them to your advantage or you may opt on another retirement device best for you. Contact me and I can get you set up
That is a great question! As with all investments, the answer lies in the small print, and the details of your annuity's contract. Generally, the safest annuity is the fixed one, with the interest rate guaranteed, and the payout clearly defined. However, if the interest rate isn't enough to cover fees and inflation, then even that investment isn't the safest place for your money. Indexed annuities can be good if the guarantees are favorable, and the fixed ones are ideal if the guarantees are solid. The trick then, is to understand exactly what it is that the annuity will do for you, and how much it will cost to do it. I hope that helps, thanks for asking!
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At our agency in California, we speak to the person to determine what they are hoping to achieve and then figure out what might help do that best. You'd want to contact an Independent Agent and do the same.
Fixed Annuities offer Guarantees. For every contractual Guarantee that an Insurance Company makes (such as 3% Guaranteed for 5 years), must be backed by purchasing a mix of US Treasuries along with a small amount of various other investments. But mostly the Guarantees made by the Insurance Company are largely backed by the financial stability of US Treasuries (which are considered the safest investment class there is).
As pointed out already, the best way to judge the financial stability of an insurance company is by their Financial Ratings. In the investment world, And ratings that is a B++ or higher is considered "investment grade". Although as the term of the contract increases, your minimum acceptable Financial Rating should increase as well in my opinion. A longer time frame creates more risk. So for a 3 or 4 year Annuity a B++ Rating might be acceptable for some people. But for an Annuity that is 6 years or longer, it is highly recommended to use an "A" Rated Carrier.