Monday, November 13, 2006

Understanding Annuities

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Annuities come in various forms – fixed, variable, income, index-linked and more – and each has its place and time in an investment portfolio. Generally, annuities are purchased as long-term investments to cover future needs like retirement or lifetime income; however, in recent times, annuities have emerged as a safe-haven for “just-in-case” money that heretofore was held in banks or government bonds. Annuities are issued by insurance companies and generally presented by financial professionals and planners to conservative, long-term savers seeking reasonable returns, safety and some access to their money in case of unexpected needs. All annuities offer triple compounding through tax deferral of earnings.

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