Tag Archives: Annuity Products

Shake the Hand of the Annuity Provider Offering the Best Annuity Deals!

With annuity rates being depressingly low, those on the verge of investing in an annuity are facing a dilemma – wait for the rates to improve, or choose from one of the annuity deals available now and make the best of it. Keep waiting and hope that you get a better deal, or shake the hand of the annuity provider offering the best deal right now?

Annuity rates depend on a number of complex factors, and according to financial experts, the rates are not set to improve significantly, at least in the short term. However, there could be tiny fluctuations in the rates from time to time. But delaying investing in an annuity may mean that the lost income due to the delay may be far bigger than any gains from small fluctuations in rates.

Even though rates may be low at the moment, there are various types of annuities available on the market, and you can find a product that best suits your needs and offers an income that you are comfortable with. A financial advisor can guide you through all the types of annuities, as well as your own needs and make an informed choice.

Waiting for better annuity deals may prove to be a bad idea on three levels. One – it may mean that you lose out on regular income due to the delay, two – while you are waiting for annuity rates to improve, rates may go even lower, and three – any attractive deals and offers currently available could be withdrawn without any notice. Unnecessarily delaying investing in an annuity in the hopes of better annuity deals may therefore mean that you not only find a better deal but also make a loss in the process.

Popular financial products being withdrawn is not without precedence. The Halifax Retirement Home Plan is a good example of this. The Halifax Retirement Home Plan was a highly popular mortgage that was withdrawn without any notice in August 2011. This was the only flexible interest only equity release plan of its kind at the time and left a lot of people who were interested in it without any other option.

In fact, annuity rates, annuity deals and indeed annuity products can be withdrawn, updated or changed on a day to day basis. Waiting for rates to improve may mean that you not only have to commit at a lower rate in the future, but could also mean that you do not get the specific type of annuity that you wanted in the first place.

Knowledge is Power When Buying an Annuity

Annuities are one of the most popular ways for people to turn their life savings into a regular income during retirement. In fact, the annuities market in the UK is the largest across the globe. There are different types of annuities, but on the whole an annuity works like this: the annuity provider, which is essentially an insurance company, agrees to pay you a regular income, either fixed or variable, for a fixed term, or for as long as you live. As an annuity once purchased cannot be cancelled or returned, buying an annuity is a decision that warrants extremely careful consideration.

The first step in making a correct choice when buying an Annuity is understanding your own needs and priorities. Knowing exactly what you need will help you make the right choice. For instance, is having a fixed, steady source of income throughout your life more important to you than risking a higher income with an investment annuity? If so, a conventional annuity may be more suitable for you. Or, would you prefer to have an annuity that grows with time, at the risk of settling for a smaller pay-out in the initial stages than a fixed life annuity? If so, an escalating annuity might be more suitable for you.

Buying an annuity correctly requires an understanding of the annuity market and how different annuity products work. You can find lots of information about annuities online through advisory websites, or even through different annuity providers. This includes finding out about different bells and whistles that may make an annuity work better for you. Buying an annuity that works best for you is all about looking in the right places, exploring the right resources and using the tools that are readily available to you.

For instance, an annuity calculator can help you determine the maximum income that you could generate through an annuity. Online annuity calculators are now widely available, and are easy to use, quick and convenient. Most calculators require basic information about your age, gender, location, and health and lifestyle habits to work out an accurate quote.

When buying an annuity, knowledge of all the aspects of the process is akin to power. The more you know, and the more knowledgeable you are, the more likely you are to find the right annuity.

Compare Annuity Providers and their Annuity Schemes

One of the factors that often gets lost while comparing financial and investment products is: who is the provider of the product? What is the provider’s standing in the industry? People increasingly compare products and shop around to find an annuity that works well for them, but a large proportion of us are not aware of how important it is to compare annuity providers as well.

It is fairly easy to compare annuity schemes, thanks to the multitude of comparison websites, and other tools and resources that are readily available today. However, it is not so easy to compare annuity providers. Comparing different insurance companies means having to learn more about each company and making sure that it is duly qualified, licensed and regulated by the appropriate bodies.

When you compare Annuity Providers, there are certain things to look out for. Always make sure that the annuity provider is well established within the industry – if not particularly in the annuity sector, then within the finance sector. Having a significant reputation to protect means that the company is much more likely to play by the rules and offer a fair deal, than a company that has nothing to lose.

The Financial Services Authority (FSA) – which was the regulatory body and watchdog for the financial industry in the UK, has now been replaced by two different ombudsmen – The Financial Conduct Authority and The Prudential Regulation Authority. The FCA is now the watchdog and regulator for the financial sector and does the job of making sure that the industry remains fair, ethical and healthy. It promotes competition between providers and ensures that customers are protected at all times.

So, when you compare annuity providers, always make sure that you select a provider that is regulated by the FCA. This will ensure that the provider is accountable to the Financial Conduct Authority and must therefore follow by its rules. This layer of accountability is absolutely essential; as it means that as a customer you have the additional protection from future malpractice or fraud.

Choosing an annuity is one of the most important decisions in life – as once purchased, an annuity can usually not be cancelled or returned. It is therefore important to make a considered and well informed choice. In order to make an informed choice, it is important not only to compare different annuity products and shop around on the open market but also to compare the annuity providers.