An annuity is not a Medicare Health Plan or other form of long-term insurance. An annuity is more or less a combination of an investment account provided by an insurance company. It is designed to help adults and seniors meet retirement and other long range financial goals. The policy holder makes a lump sum payment or a series of payment to the insurer, and they in turn make periodic payments to you, which can begin immediately or at a future date. One of the benefits of an annuity is that it allows individuals and families to tax-defer the growth of the annuity.
Medicare Insurance and Types of Annuities
Just as you compare Medicare plans, you should also compare the three different types of annuities before you choose one.
Medicare Insurance and Fixed Annuities – This type of annuity is where your insurance company agrees to pay you no less than a specified rate of interest during the period of time your account is growing. They also agree to make periodic payments at a specified amount per dollar in your account. The periodic payments can be definite, such as for 20 years, or indefinite, such as for the lifetime of you or the lifetime of you and your spouse.
Medicare Insurance and Indexed Annuities – With an indexed annuity, your insurance company credits your account with a return based on an index, such as the S&P 500 Composite Stock Price Index. These contracts also state that their total value can be no less than a specified minimum, regardless of the performance of whatever index you choose.
Medicare Insurance and Variable Annuities – In a variable annuity, the individual or family have a broader range of options in which to invest purchase payments, which typically include mutual funds. The rate of return on the purchase payments and periodic payments received will vary depending on the performance of the mutual fund or other investments selected.
Trusted Senior Specialists and Annuities
Just as with Medicare health plans, we at Trusted Senior Specialists can help you decide if an annuity is right for you and your family, as well as help you choose the one with the best options for your situation. If you have any questions about annuities, Medicare insurance, or any related area, give us a call to be connected with one of our professional staff at no cost.