A life insurance annuity contract requires you to pay an agreed amount to a company in exchange for the promise of regular income for the rest of the beneficiaries’ lives once the investment matures. However, one caveat that sets them apart from other annuities is that the holder of the contract must be deceased for payments to begin. These financial products are extremely important for families with one breadwinner, because if something happens to him or her, the rest of the family has no source of income.
However, a single earner family need not worry if this person takes out a life insurance annuity. A policy will have to be taken out with a value high enough to provide a benefit sufficient to support the family for the rest of their lives, if possible. This mutual fund will receive a certain amount of interest, say 6 percent, to provide a safe and conservative return. After all, it’s not the family’s goal to make huge profits; they are only interested in protecting the premium from risk.
Investing in life insurance can be the perfect go-to if you have health issues or other issues that may prevent you from being covered in a more traditional way. It is a relatively affordable solution for individuals to hedge against risk and promote the goals they have set for their investments. Another great benefit of choosing this option is that your age does not play a role in your approval; other insurance options won’t approve you or in this case charge you incredibly high premiums.
While many people assume they won’t need life insurance once they retire, there are many reasons why someone would want to keep this investment until their death. One of the most common reasons is for estate purposes. The profits accrued in these accounts are usually deferred for distribution not only to the original policyholder but also to the heirs. These investments can also be held to pay off the final cost of a lifetime policy. The cash value of these policies can also be collected before death if the holder wishes to borrow against its value to repay the loan.
When you are looking for a life insurance annuity, you will soon find that there are many different options available. It will take care to choose the one that best suits your investment goals. That is why it is very important that you have a financial advisor that you trust and who can help you make these decisions.