When purchasing an annuity, it is best to consider buying only from companies that have received high ratings from each of these services.
But what exactly are the tax benefits? And are there any drawbacks? It's important to know the answers to these questions before deciding whether to purchase an annuity.
A fixed annuity is a contract between you and an annuity issuer, usually an insurance company. In its simplest form, you pay money to the annuity issuer; the issuer invests the funds and pays the principal and its earnings back to you or to your named beneficiary..
A private annuity is the sale of property in exchange for a promise to pay income for the rest of your life. A private annuity differs from a commercial annuity because the buyer purchases the annuity from a private party instead of a financial organization (e.g., an insurance company).