Why No One Talks About Financing Anymore

Sound Financial Planning with Insurance and Annuity One of the most important elements of sound financial planning is having insurance Insurance is meant to protect a person and their loved ones in many ways example in accidents, sickness, death, loss of a job etc. there are factors that can guide one on the kind of insurance policy to choose from. Some of these factors are age ,family size and one’s economic situation. annuity kind of policy would not be the best choice for instance for a young new worker . Insurance companies issue a type of policy called annuity that allows a person to save up money for retirement. One can either pay in this money in lump sum or in a number of small payments. With time these contributions will earn interest according to the rates agreed by the insuring company. The benefits of having a n annuity is that you will have a stream of income after a period of time. Another group of people who can have an advantage with having annuities are those who have won large cash settlements either in court cases and also those who have won the lottery. Once a contract is signed, and an amount is agreed upon, then this large sum of money is released to the owner as a steady flow of income.
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Terms like accumulation phase and annuitization phase are commonly used with this policy. There is the first stage where one is just paying into the account and does not get any payments and it is called accumulation phase. The annuitization stage is when the client will start receiving some steady income from the account.
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The people more suited for annuities are the older and more financially stable individuals. This is because the money saved is illiquid and one is subject to withdrawal penalties. For younger individuals, this is not recommended as they require liquid money constantly. A young person has many other insurance policy options best suited to their day to day activities. Some of these policies have to do with insuring their young children’s future education, health insurance and also insuring their assets. It is therefore wise to say that financial planning is important to all regardless of age. The only thing to observe when planning is to gauge the suitability of the chosen policy to one’s life. Since there are many companies offering insurance policies, it is good to do a thorough search first on the best one. When you have a financial plan for the future, you give the best present to your family and yourself.