Coats & Associates

Annuity insurance is a type of financial product that provides a stream of income to an individual, typically over a set period of time. An annuity contract is typically purchased with a lump sum of money, and the insurer will then make regular payments to the policyholder, either for a fixed term or for the remainder of the policyholder's life.

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There are two main types of annuities: fixed and variable. A fixed annuity guarantees a fixed rate of return and provides a guaranteed income stream for the policyholder. A variable annuity, on the other hand, allows the policyholder to invest in a variety of underlying assets such as stocks and bonds. The returns on a variable annuity are not guaranteed and may fluctuate based on the performance of the underlying investments.

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Annuities are often used as a retirement savings vehicle, as they provide a guaranteed income stream in retirement. They can also be used to transfer wealth to future generations, as some annuities offer death benefits that can be passed on to beneficiaries.

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It's important to note that annuities are long-term investments, and they come with fees and charges that can have a significant impact on the overall return. Therefore, it's crucial to understand the terms and conditions of the annuity contract, including the fees and charges, before making a decision.