The current volatility in the stock market has made investors realize that equity prices do not always rise. Bond prices have also fallen dramatically due to inflation and the Federal Reserve’s recent measures to raise interest rates. Investors are increasingly aware that there is no assurance that the value of their portfolio will improve over time, and they should investigate alternate sources of assured income like annuities. Annuities come in various shapes and sizes. Some are difficult to understand, while others have large commission fees. The Single Premium Immediate Annuity (SPIA) is simple to understand, has no hidden commission charges, provides a predictable income stream, and is unaffected by market volatility. The most basic explanation of SPIA is paying a set amount to a life insurance company. In return, the company pays you a guaranteed income for the rest of your life (or for a specific time frame that you specify). SPIAs have several advantages, including being simple to understand, having no yearly fees, having minimum commissions (built-in), and the income you receive is contractual and not dependent on market conditions. You can choose an inflation option [(Cost-of-Living Adjustments (COLA)], such as a 3% annual income rise. However, this method would initially result in a lower income. If you were eligible for a $524 monthly payment without a COLA, a 3% COLA would reduce your monthly payout to $374 (which would increase by 3% per year). “Life with a period certain,” “life only,” and “cash refund or installment payment” are the three main alternatives. The monthly payment for the “life only” option is the highest. You can choose this option for yourself and your spouse for as long as you live. Naturally, your monthly income will be reduced if your policy covers both of your lives. If you choose “life with a period certain,” you can specify how long you wish to be protected. You can select a term that corresponds to your life insurance policy. So, if you had a term life insurance policy that paid proceeds to your spouse for 20 years, you could choose a shorter time frame. Since if you die after only 10 years, your named beneficiary would receive the benefits of your policy, and you would receive a higher monthly income for 10 years. The “life only” option provides the maximum lifetime payment while ensuring that 100% of your initial premium will go to the beneficiary of your choice. The remaining sum not already paid would be paid to the beneficiary. Choosing the “life with a cash refund” option will provide your beneficiaries with a lump sum of the difference between the original premium and the amount collected in monthly payments. This is the second-best guarantee, and it covers 100% of your initial premium.
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Phone: 3037587400
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