Insurance Options – Annuities, Mutual Funds, and IRA’s

The insurance world is full of helpful options, and investment opportunities for the living, as well as survivors.  Three of these choices include annuities, mutual funds, and IRA’s.  Annuities can be purchased from banks, mutual fund companies, stockbrokers, financial institutions, and insurance providers.  There are immediate and deferred annuities, and variable or fixed annuities.  The money first put into an annuity is taxed like ordinary income, then is invested and grows tax free until it is withdrawn.  A withdrawal can be a lump sum or a payout over a period of time.

Annuities are flexible, and offer wise planning for retirement, if you don’t have a retirement plan with your employer.  It is a guaranteed monthly income, with tax deferred growth.  An annuity is a financial contract.  It is a form of savings, and has the same investment assets of a retirement account with the guaranteed income features of insurance.  Annuities are sometimes explained as the other side of insurance.  If you die too soon, life insurance provides financial coverage.  Annuities provide a hedge in case you outlive your retirement savings.  Annuity eventually liquidates principal, and life insurance creates principal.  Be sure to check out free online insurance quotes for annuities.

Mutual funds are collected when a company pools money together from many investors, then invests the money into bonds, stocks, money-market funds, or securities.  They are redeemable.  When an investor wants to sell their shares, they may sell them back into the fund.  Many varieties of mutual funds include index, stock, bond, and money market funds.  Each has a different investment purpose and portfolio, and some may be exposed to volatility, fees, expenses, and risks.  An insurance agent can explain mutual funds in more detail to you online. 

IRA’s, or individual retirement accounts, are a safe way to prepare for retirement.  An IRA is actually a savings plan, and allows for some income tax benefits.  The money you put into it is called a contribution.  This money accumulates tax free until money is taken from the account.  When you make a withdrawal, it is called a distribution.  The initial purpose of an IRA was to help an individual prepare for retirement.  IRA’s have evolved as time has passed.  There are now 11 types of IRA’s.  Most everyone has heard of a Roth IRA.  Other types include rollover, educational, traditional, and inherited.  The insurance and the financial world are complicated for many.  Start with the internet, and learn about annuities, IRA’s, and mutual funds today.