Overwhelmed by the Complexity of Plans? This May Help

Why it is Important to Have Insurance and Annuity for Financial Planning One of the most important elements of sound financial planning is having insurance There are a number of ways insurance protects a person and their loved ones for instance in death, during sickness and when one is laid off from work The insurance decision one makes and the kind of policies chosen depends on a number of things. to get the most appropriate insurance policy, one should look at their age, economic situation and their family. a fresh new worker would for instance be advice not to go for annuity kind of policy. An annuity can be defined as a type of policy that is issued by insurance companies and allows one to save money for retirement. Small cash payments can be made in this kind of policy or one can choose to do a lump sum one off payment. Your contributions are guaranteed to earn interest over time according to the interest agreed upon. The good thing about having an annuity is that one is guaranteed a stream of income after a period of time. Other people who can benefit from annuities are winners of lottery games and those who have won large cash payments. Once a contract is signed, and an amount is agreed upon, then this large sum of money is released to the owner as a steady flow of income.
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The two commonly used terms with this policy are accumulation and annuitization phase. When one is paying in to the account and no payments are being done, this phase is known as accumulation. The second phase of the contract is when the clients starts receiving some agreed on payments from the accounts.
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Annuities are best for older more financially stable individuals. This is because the money saved is illiquid and one is subject to withdrawal penalties. For younger individuals, this is not recommended as they require liquid money constantly. A young person has many other insurance policy options best suited to their day to day activities. The young individuals have a host of other issues that need to be insured such as their young children’s education, their family health and also their assets. Regardless of age sound financial planning should be done by all. One needs to check carefully and choose the most suitable insurance policy for their circumstances. Since there are many companies offering insurance policies, it is good to do a thorough search first on the best one. Financially planning for ones future is one of the best gifts one can give to themselves and to their families.