How Does An Annuity Differ From Life Insurance?
0 POINTSContact Meview profileDavid RacichPROFountain Hills, ArizonaAnnuities and Life Insurance are mortality insurance products. Annuities are generally purchase for income, sometimes for lifetime income for retirement scenarios. Life insurance is generally purchase for indemnification or inheritance planning scenarios, but it can also generate tax advantaged income. Some planners use both in combination for retirement income strategies.Answered on May 29, 2013+01+1 this answer
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5877 POINTSview profileStan Cox IIInsurance Adviser - Broker, SC Insurance Services, Oahu, HawaiiBoth annuities and life insurance are provided by life insurance companies, and there are a number of differences between the 2 products. For one thing to purchase an annuity doesn't require any underwriting such as medical questions or exam. Annuities are a way to liquidate an estate while life insurance is a way to create an estate. There are different types of life insurance and not all, (Term), have or gain any cash value. Whole life insurance does have cash value and can be accessed by the owner, but doesn't have to be. Annuities must have their cash value distributed after the accumulation period and the distributions are taxed as income, where the cash value of a whole life policy may be borrowed without paying tax on it. And the death benefit is paid to the beneficiary income tax free.Answered on July 5, 2015flag this answer
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