Life & Annuity Insurance



Life insurance is simply intended to cover the financial risk of death. In general, anyone who wants to make sure that their family does not have to change its lifestyle after his or her death needs to have it. Life insurance has several variables: duration of coverage, frequency and stability of payments, as well as payout method and amount of coverage. You can use simple rules of thumb, but a real evaluation of your needs should take your whole financial picture into account.

Annuities are a type of tax-deferred retirement plan. Unlike 401(k)-plans, annuities are funded using income that has already been taxed. Tax on any interest, capital gains, and other earnings of your annuity contributions, is deferred until you start withdrawing from your plan. In addition to being a retirement vehicle, variable and fixed annuities also carry an insurance component. Depending on the policy one chooses, insurance choices in variable and fixed annuities include guaranteed death benefits, guaranteed payments for as long as one lives, or even payments for the life of one’s beneficiary.

Pensions provide a steady income to an employee upon retirement, typically in the form of a guaranteed annuity. A pension created by an employer for the benefit of an employee is commonly referred to as an occupational or employer pension. Occupational pensions are a form of deferred compensation, usually advantageous to employee and employer for tax reasons. Many pensions also contain an insurance aspect, since they often will pay benefits to survivors or disabled beneficiaries, while annuity income insures against the risk of longevity.