No one strategy for life insurance annuities

Nov 15, 2010

Consumers may consider a number of products when looking at life insurance annuities.

A number of Americans may have enough put away in 401(k) accounts for their retirement and will also be able to draw from pensions to make ends meet.

However, other consumers might have to rely on other investment vehicles to provide guaranteed payments through their later years. One of those may be an annuity from a life insurance company, which can provide a source of income with less risk than some alternatives.

In a recent piece for Money Magazine, senior editor Walter Updegrave said there isn't one particular strategy when it comes to investing in immediate life insurance annuities. Those who want to be able to access their funds for emergency expenses should probably not put all of their money in such a product, for example.

Updegrave said one approach is to calculate the annuity's payout in combination with any Social Security payments in an effort to pay for required costs. Meanwhile, other investments can be used for things like entertainment.

There are a number of annuity products available to consumers, including variable and fixed investment options. While the former offers greater return potential, it also presents higher risks.

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