The difference between Annuity and Insurance

July 9th, 2012

I was offered an Annuity Plan by an acquaintance who’s working in an insurance company. I thought annuity is the same as an insurance policy. The agent explained that an insurance is designed to insure against risk while an annuity is designed to protect and preserve income and ensure that it reaches the person it was intended for. In short an Annuity is like a Pension Plan, where one will invest for a certain period of time with an amortization ( which can be paid monthly,quarterly or annually) . The annuity rates varies on the amount of policy and the duration of payment.  The offer was very attractive for our retirement plan. We  are not getting any younger, so we need to invest now for our future

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