Annuities are insurance merchandise in which the annuity-holder tends to make a payment or a amount of payments to the firm providing the annuities, in exchange for a certain stream of cash flow for the relaxation of the his or her lifestyle or up to a pre-agreed expiry date of the annuity.
Based on their returns (the stream of cash flow from an annuity), annuities are categorised as either mounted level or variable level annuities.
In mounted level annuities, the annuitant is certain of a mounted level of cash flow from the annuity, no matter of the general performance of the investments into which the annuity top quality is invested. On the other hand, returns from variable annuities differ based on the general performance of the investments into which the annuity top quality is invested. Both equally mounted level and variable annuities have their exclusive benefits and cons.
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