In the most basic way, annuity can be described as an investment contract that an investor enters in with an insurance company and enjoys special tax benefits. Adding it to your investment portfolio can prove very profitable but this starts by selecting the right investment and the right annuity advisor who understands your financial goals.
It is always advisable to adopt a conservative approach in investment particularly when one is approaching the retirement age. At this time, the nest-egg reaches its largest possible level and is very vulnerable to market fluctuations. This is why annuity is usually the better option.
There are many benefits that are associated with this option which include a guaranteed future cash flow and the retirement income increases every year. This is the easiest way to ensure that you pass something to your heirs and protect any of your assets from the creditors or probate.
Annuities come in several types which include immediate annuities, the equity indexed, variable and fixed annuities. Each of these varies in one way or the other and has its own merits and demerits. It is the job of your consultant to outline all these for you and tell you which option is the best and which one is not.
Normally, the consultant is expected to advice his or her clients to take the plan that to the best of their interest. This should be the one the client is interested in after being informed of all the necessary details. Basically, a good advisor educates his customers on the investment plans that they are curious about. All these are done why adhering to a strict code of conduct governing the rules of operation.
The major issues that your consultant should avoid include misrepresentation of information in sales of the insurance or other financial related products, false advertising, defamation, twisting, rebating (offering the client inducement in any form), use of bait and switch to get client purchase what was not originally planned for.
In addition to these, an annuity consultant must adhere to the same rules governing all other players in financial sector. This include talking ill of the services, products and character of their competitors (unless there are proven criminal or civil records to support their case). They should instead focus their effort on informing the current and prospective clients on what the stand to benefit from after they buy the proposed product.
When a consultant believes the insurance firm may be facing some financial problems in the near future, they prefer not to recommend products from such firms to their clients. This is in essence trying to protect the client, but is the right measures are taken, the solvency issues should not arise, after all evidence shows that annuities are the best way to mitigate against most risks including longevity risk.
Here are some tips that could help the consultants locate the best option for their clients. Evidence shows that the bigger the insurance firm, the lesser the solvency risks. In addition to this, paying close attention to Fitch, Moodys and S&P ranking can be very helpful. Lastly, it is important to clearly understand the terms of engagement among others.
It is always advisable to adopt a conservative approach in investment particularly when one is approaching the retirement age. At this time, the nest-egg reaches its largest possible level and is very vulnerable to market fluctuations. This is why annuity is usually the better option.
There are many benefits that are associated with this option which include a guaranteed future cash flow and the retirement income increases every year. This is the easiest way to ensure that you pass something to your heirs and protect any of your assets from the creditors or probate.
Annuities come in several types which include immediate annuities, the equity indexed, variable and fixed annuities. Each of these varies in one way or the other and has its own merits and demerits. It is the job of your consultant to outline all these for you and tell you which option is the best and which one is not.
Normally, the consultant is expected to advice his or her clients to take the plan that to the best of their interest. This should be the one the client is interested in after being informed of all the necessary details. Basically, a good advisor educates his customers on the investment plans that they are curious about. All these are done why adhering to a strict code of conduct governing the rules of operation.
The major issues that your consultant should avoid include misrepresentation of information in sales of the insurance or other financial related products, false advertising, defamation, twisting, rebating (offering the client inducement in any form), use of bait and switch to get client purchase what was not originally planned for.
In addition to these, an annuity consultant must adhere to the same rules governing all other players in financial sector. This include talking ill of the services, products and character of their competitors (unless there are proven criminal or civil records to support their case). They should instead focus their effort on informing the current and prospective clients on what the stand to benefit from after they buy the proposed product.
When a consultant believes the insurance firm may be facing some financial problems in the near future, they prefer not to recommend products from such firms to their clients. This is in essence trying to protect the client, but is the right measures are taken, the solvency issues should not arise, after all evidence shows that annuities are the best way to mitigate against most risks including longevity risk.
Here are some tips that could help the consultants locate the best option for their clients. Evidence shows that the bigger the insurance firm, the lesser the solvency risks. In addition to this, paying close attention to Fitch, Moodys and S&P ranking can be very helpful. Lastly, it is important to clearly understand the terms of engagement among others.
No comments:
Post a Comment