Most insurance companies provide annuities and life insurance products. The main difference between “life insurance” and an “annuity” is how the payments are paid out.
An overly simple explanation is: An annuity is almost like the opposite of life insurance. It continues to pay you a stream of income until you pass away. Life insurance on the other hand pays out to your beneficiaries once you pass on. So the difference between annuity and life insurance lies in the benefits and the timing of it. An annuity intends to support the investor's future income requirements while in life insurance, meets the need of the beneficiaries. Life insurance is mainly a financial product which protects your loved ones when the insured has passed away.
Annuities pay a stable steady income to secure your future income needs. It is a safe, secure stable source of income, ideal for retirees. You can start receiving payments “immediately” or “deferred.” Annuities can provide tax-deferred savings for retirement.
Life insurance generally pays out one “lump sum” payment to the beneficiaries, upon death. It is absolutely essential to provide for the future needs of surviving loved ones so you can meet, or even exceed their expenses such as: living costs, covering the cost of the funeral, or to satisfy any other financial obligation you desire for your loved ones after you pass away.
Both annuity and life insurance products provide death benefits. For example if you pay $100 to an insurance policy, when you die, your surviving beneficiaries could receive up to several hundreds of thousands of dollars. With an annuity, when you pay $100 as premium and die, your beneficiaries will only receive paid premium with interest, minus any payouts made. So if your main need is a death benefit, opt for life insurance.
Note: Annuities can be confusing to many people. As an "independent licensed agent" I try to explain things to you in simple terms so you feel comfortable making a decision. Then I can help you choose an annuity that you feel best fits your needs from a large choice of different insurance companies. Plus if you choose to work with me you will have personalized service by a local independent agent that can shop rates for you, rather than working with a captive agent working for just one insurance company. If you would like my assistance to discuss and/or start the process of getting an annuity please call me at 941-404-5334.