Why it is Important to Have Insurance and Annuity for Financial Planning

 

Insurance should be a very important aspect of anyone's sound financial plan. 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 many factors that dictate which insurance policies and the type one should choose.   to  get the most appropriate  insurance policy, one should look at their age, economic situation and their family.  For instance it is not wise for a young person who is just starting on their first job to get an annuity kind of insurance.

 

 A type of policy that can be issued by insurance companies at http://insurancespc.com/ and allows you to save up money for retirement is called annuity.   Small cash payments can be made in this kind of policy or one can choose to do a lump sum one off payment.   With time these contributions will earn interest according to the rates agreed by the insuring company.  The good thing about having an annuity is that one is guaranteed a stream of income after a period of time.

 

 People who have suddenly gotten large sums of money like winning the lottery or winning millions from court cases can also benefit from having annuities.   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.

 

 The two commonly used terms with this policy are accumulation and annuitization phase.    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 second phase called annuitization  is when the client finally starts getting some pay-outs.

 

Annuities are best for older more financially stable individuals.  Since the cash saved is illiquid one is sure to be charged with withdrawal penalties for trying to get the money before the agreed upon time.   For younger individuals, this is not recommended as they require liquid money constantly.

 

Younger individuals can however go for insurance covers best suited for their day to day lives.   The young individuals have a host of other issues that need to be insured such as their young children's education, their family health and also their assets.

 

 It is therefore wise to say that financial planning at http://insurancespc.com/ is important to all regardless of age.   One needs to check carefully and choose the most suitable insurance policy for their circumstances.  There are also a number of insurance companies that one can research on so as to get the best cost effective insurance policy.

 

 One of the best gifts one can give to their families and to themselves is financially planning for their future.