Life Policy Protects The Future
A whole life policy is a financial vehicle that we invest in as a hedge against risk in the event that we pass. This way, any dependents are protected through income loss and general emotional stability resulting from recovery. It’s generally a blanket plan where a premature or unexpected event occurs. Even in retirement, if there’s anyone who would suffer financially as a result of your loss then you want to consider purchasing this type of policy.
Fixed Annuities Work a Bit Differently
In the opposite fashion, what is known as longevity insurance by certified distributors and industry insiders is a slightly varied vehicle. Minimum investment thresholds usually apply; you inject money into the account upon which the insurer guarantees a fixed income for life. Maybe your worried retirement returns won’t be sufficient to carry you, or that you may outlive the pot because you’ve kept yourself in great health. An annuity ensures you won’t run out money in your later years – an annuity is money that you cannot outlive over the long term.
This should clear up the confusion surrounding whole and term life policies and fixed annuities. Keep in mind that both play key roles in an individual’s financial strategy. It is recommended that you meet with a professional who can help determine which is the most appropriate option based on your circumstances, financial wherewithal, and risk tolerance levels.