Opt for a Death Benefit Annuity for Heirs

According to Matt Wallace of The Times Herald, “Not all annuities (are) created equal.”  Annuities are an excellent investment for many investors in many circumstances, but you always want to spread your savings over multiple investments that will be used for different purposes.  Annuities are meant to provide you with a lifetime stream of income to help cover your basic expenses.  It is important to remember that annuities are not meant to be a kind of savings account where you can just withdraw lump sums whenever you have a large expense.  High fees can be associated with early surrendering of your annuity, which is why it is always best to leave the money in the investment and receive your monthly payments when the contract term specifies.

Immediate annuities offer lifetime income to those who wish to start receiving their monthly payments right away.  If you would like to pass the remainder of your annuity onto your heirs, opt for a death benefit annuity.  While the rider will cost more, it will ensure that your beneficiaries receive the rest of your principal.  As the life expectancy rises and more Americans live part of their lives in skilled nursing facilities, it is important to determine whether or not your annuities are Medicaid eligible.  If not, you will not be able to receive Medicaid to pay for your skilled nursing until the annuity is depleted.  Many Americans now purchase long term care insurance or annuities tied to the insurance to make sure they can pay for their skilled nursing, should they ever need it.

Deferred annuities don’t start paying you right away like immediate annuities.  One benefit of these investments is that you are able to defer the taxes on your earnings until you start withdrawing the funds.  While deferred annuities are not Medicaid eligible, you can opt for a hardship waiver of any surrender charges so that you won’t be fined in the case of needing your annuity to pay for skilled nursing care later in life.  By finding a reputable financial advisor and getting expert advice, you should be able to avoid any negative sales practices.  Understanding all the terms of your annuities, whether you are looking at a 5 year fixed annuity or an immediate one, will ensure that you don’t have any surprises with your investment.  Annuities should also be part of a portfolio of investments, so that you have other means to withdraw large sums should the need arise.

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