Quote Today Blog
Choosing the right annuity option to meet your needs is tricky. As with everything else you will need to weigh the pros and the cons. You’d want the financial security you deserve come retirement. An annuity will give you that guaranteed protection with income regularly paid annually to you after you retire. You can model it to suit your liking, from health and lifestyle concerns to the ability to leave lump sum cash or income to your heirs. If you wish to be assured protection from inflation, escalating annuity is the option to choose.
Why choose escalating annuity?
As it pays you increasing income each year after you retire, escalating annuity differs from level annuity in that as it is linked to rates of inflation you have the advantage of maintaining spending power. It can increase by either following changes to the Retail Prices Index or by a set amount of 3% or 5%, for example. There are many factors to consider in choosing which option best suits you. It will depend on how long you expect to live or if you have other sources of income. One has to plan by thinking about how the way you live your life will affect your financial needs.
Are there any more benefits?
If for other insurance plans, you may not have wanted to disclose your health conditions for fear of higher premiums, in getting an annuity, it's different. There could be more money entitled to you if you speak about certain things about your lifestyle. For example, some agencies ask questions to determine if you qualify for enhancements to your plan.
You might get asked if you are a smoker, or if you are overweight. They might ask you if you have raised blood pressure or high cholesterol. They can also ask you if you have a life-threatening medical condition. With enhancements, and in choosing an escalating annuity, your finances are secured as you are guaranteed enough buying power for your needs.
Do the pros outweigh the cons?
An escalating annuity pays less at the start. However, your income will increase each year and can eventually overtake level annuity–that is, if you live long enough. Another disadvantage is that if your set amount is lower than the rate of inflation, you might have a struggle with maintaining spending power. With these disadvantages, it does seem tempting to choose a fixed retirement income, but most people who decided to pick this have struggled with keeping with inflation in their later years. Selecting an escalating annuity can be your option to avoid that.
At Quote Today Insurance, we put our clients first by offering them policies that they can afford. Learn more about our products and services by calling our agency at (855) 855-2522. You can also request for a free quote by CLICKING HERE.