Are annuties are as good as my insurance agent says they are.?
Posted on Nov 06, 2009 under Insurance Information |My insurance agent tells me that an annuty is a safe way to invest. Is this true and are there any safer ways? I would like to invest 30,000 for my grand children when I pass away. I do not want them to have to wait on the money for everything to go through probate. I ahve been told that probate can take years. Does any one have any personal experince with the annuties paying out? Any help at all would be great/
November 6th, 2009 at 7:57 am
i agree with ur agent
November 6th, 2009 at 7:57 am
Having an annuity doesn’t have anything to do with probate. Do the due diligence and you will discover the only one that gets richer is the insurance company.
November 6th, 2009 at 7:57 am
If your insurance agent is trying to sell you an insurance policy that builds up cash value in the form of an annuity, run, don’t walk, to the nearest exit. Insurance is insurance, and no matter what an insurance agent tells you and no matter what he calls it, insurance is not an investment. Buy term insurance for the insurance and get your investment advice elsewhere. What you may be seeking is a Living Trust, where you can pass on your assets to your children, or even children of your great-great-great grandchildren. For example, you might take $1,000 to be invested in a certain way, to become the property some as yet unborn descendant maybe 200 years in the future. If you give the money to an insurance agent then the insurance company will end up with most of it and your heirs will end up with nothing. Don’t go that route.
November 6th, 2009 at 7:57 am
lucky2bealive is correct. An account with a beneficiary named on it doenst have to go through probate. It doesnt have to be an annuity. Annuities have high fees and surrender charges. Your insurance agent benefits from that, with his commissions. You or your beneficiaires also have to pay taxes on it at your normal tax rate as well.
November 6th, 2009 at 7:57 am
annuities might be a good investment option IF AND ONLY IF you don’t the lump ammount, but will be built over a lot of years, since for many people it’s the only way to access decent investment rates. However, ff you already have the money (as it seems), invest it with an investment agent (say, mutual funds) and leave your grandchildren as beneficiaries.
November 6th, 2009 at 7:57 am
H&R is being sued because the people sueing feel that their investments were loosing worth because the fees were eating through their rate. If you factor in fees, inflation and taxes, anything under 7.5% is losing worth. What they are doing is charging you to hold government bonds you can hold yourself. Just look at the government bonds and the percentage you annuity is suppose to grow. They are about the same.
You can one up them. Set up a Roth and buy I-bonds that are now making 6.7% right now and will increase if inflation comes back. There is generally a fee for having a Roth. I got around that by putting enough money in my Roth to gain money off of money market interest. The money market interest covers the fee. With a Roth, you don’t have to care about taxes. As part of owning a Roth, you have to claim where this money is going to go to when you die. You already figured that out, so you add them to the list.