An insurance term you might see quite a bit is annuity.
Annuity by definition is: a long-term investment that is issued by an insurance company designed to help protect you from outliving your income.
You are able to purchase this agreement and then what you contribute is converted into payments back to you.
There are different types of annuities as well!
- Fixed annuities: allow you to lock in a rate of earning that, even over long periods of time, remains unaffected by market ups and downs. The principal investment and a specified interest rate are both guaranteed. These are designed for long-term retirement goals
- Immediate annuities: an annuity contract that is purchased with a single payment and pays a guaranteed income that starts almost immediately. Such annuities are especially suitable for retirees who are concerned about outliving their savings
- Fixed indexed annuities: a tax-deferred, long-term savings option that provides principal protection in a down market and opportunity for growth
Annuities are not investments but contracts between you and your insurance company. Annuities are also very versatile and sometimes confusing, so asking your FUI agent what the best option is for you, is a great idea. They will show you your options and let you know how to make it best work you and your family.