Florida Insurance companies offer many types of policies to residents. In addition to the common homeowner and automobile driver insurance policies, insurers can indemnify Floridians against a wide range of other risks. Here are two other common insurance products that could make your life more secure and worry-free. If you need a quote simply jump over to FloridaInsuranceQuotes.net and get a free quote for Florida Insurance.
Annuities are like a hybrid of investment and insurance products. There are several different kinds of annuity policies available to buyers in Florida. Insurance policies like annuities pay a fixed sum of money to the holder yearly for the remainder of their life. The fixed sum required for annuitization can be paid in a lump sum, or more commonly paid over a longer period of time. Annuities are designed to supply a steady cash flow for retirement years. Annuities can be:
Immediate annuities allow the policyholder to begin collecting payments right away after a single lump-sum payment. Annuity payments are usually made monthly or sometimes on a yearly schedule.
Deferred annuities work by allowing the policyholder to pay into a fund over time to build the required balance during what is called the accumulation period. The payments are augmented by interest or dividends that are held in an accumulation fund. Interest rates on the accumulation fund may or may not be guaranteed.
Fixed annuities provide predetermined payout amounts regardless of the amount of interest an annuity account holds. The policyholder cannot lose their investment in the annuity once the payments begin, and the underwriter cannot change the payment amounts. In this manner, risk is entirely transferred to the annuity company.
A variable annuity is a form of a Security, and can change with volatility in the economic markets when the underlying investments that will fund the payouts of the annuity fluctuate. This type of annuity policy holds more risk for the policyholder, but can possibly deliver a higher rate of return than fixed annuities can.
Life insurance is a way for Florida insurance customers to put aside money now in order to ensure financial security for their family in the event of the policyholder’s death. It’s designed to safeguard your family’s ability to meet their needs that were previously taken care of by your income.
Life insurance allows you to choose the term of your coverage and the amount of money to be paid out to your heirs, so it’s easy to find a policy that you can afford.
Term Life Insurance
Florida insurance customers who want to insure themselves in the event of their death during a specified period while they’re paying premiums opt for Term Life Insurance. Term life policies generally offer more coverage for lower premiums than other life insurance policies. Term life policies are not designed to accumulate cash value like annuities do.
Whole Life Insurance
Whole Life policies are effective for the entire life of the policyholder. They provide a fixed dollar payout in the event of the policyholder’s death and charge a fixed amount to keep coverage in effect. Unlike Term life policies, the cash value of your contributions can accumulate the longer your policy is in effect. These earnings grow tax-deferred until you surrender the policy or pass away. Whole Life policies sometimes include provisions to provide loans to policyholders using the accumulated premiums as collateral. If you die before these loans are repaid, the remaining balance is simply deducted from your death benefit payout before distribution.
Some whole life policies earn dividends, which can either be used to pay premiums or can be taken as cash as they are earned. They are not normally taxable.