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Article Archive >> Business

Your Insurance Matters: Concerned about market turmoil?

Your Insurance Matters
Concerned about market turmoil?
By Shirley R. Lamdan, CLU

Concerned about market turmoil? If you're the kind of person who worries about Ireland defaulting, about the ups and downs of the price of oil, and who worries about the market from day to day, or even minute to minute - keep reading. Help is on the way.
Since 2000, the U. S. stock market has declined twice by more than 50 percent. I'm sure you remember when the Dow recently dropped by 1,000 points in just twenty minutes.
Would you like a safe haven for the money you don't want to risk? Tired of pathetically low yields from certificates of deposit? Then you owe it to yourself to take a fresh look at fixed index annuities.
Fixed index annuities don't charge up-front fees (variable annuities can impose significant fees). They offer choices of several broad-based indexes, such as one based on the Standard & Poor's 500-stock index. There are also fixed interest allocations.
Indexed interest is locked in each year. There are no losses. Only a zero is recorded for a poorly performing year -- but no minus signs.
This is a very powerful advantage over direct market investment: the fixed index annuity does not have to "make up" previous losses.
The fixed index annuity is a tax deferred annuity so accumulations are not taxed unless withdrawn.
There's plenty of opportunity to access your money: you can withdraw 10% of your money each year. These are called "free withdrawals". There are contract loans available as well.
Nursing home riders give you access to your funds if you enter a long term care facility. Other riders allow you to withdraw your money if you experience substantial medical expenses. There are enhanced death benefit riders to help beneficiaries with certain costs such as taxes.
These fixed index annuities offer upside potential without risk of loss. In return for no minus signs, upside potential is "capped". The caps are set periodically by the insurer and they vary among insurance companies.
You choose a fixed index annuity with a time frame suitable to your needs. Five, six, and ten-year contracts are popular.
Keep in mind that the insurer will impose surrender charges for early withdrawals exceeding the yearly 10% "free withdrawal". (Banks charge penalties for CD early withdrawals.)
Your independent insurance professional will help you "shop" for the tax-deferred annuity that suits your needs and your time frame. Many insurance carriers offer these tax-favored annuities so you can compare product features and companies. Financial ratings are very important so your insurance professional will also discuss the insurers' financial ratings with you.
So, if you need a secure and tax-favored accumulation product for the money you don't want to risk, these tax-deferred annuities might be for you. No one has lost money in fixed annuities. Compare that to the stocks of even excellent corporations, which can drop way down and stay low for many years.

Shirley R. Lamdan, CLU. Since 1982, Shirley R. Lamdan, CLU of Hagerstown, MD has been providing independent retirement and insurance services to individuals, corporations, and non-profits. Contact her at: 301 791 9427 or 800 628 3449. The website is: lamdanselect.com. E-mail: slamdan@lamdanselect.com.


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