What is the difference between an annuity and a life insurance policy?


To use an inappropriate analogy, if you think of annuities and whole life insurance as buying a house at full price.

年金計劃An annuity insurance policy is the equivalent of taking possession of your home and developing an ongoing stream of financially stable rent. Annuity plan annuity insurance is a long-term savings insurance product that provides us with a reliable pension insurance benefit. Its core feature is to receive money from the insurance company every year or every month until the death of the insured, which is a reliable cash flow to ensure that our quality of life will not be affected too much after retirement. Whole life insurance can be categorized into two types: fixed life and increasing life.

Fixed life insurance is a traditional type of 人壽保險 .

Regardless of the cause of death or total disability of the insured, the insurance company will pay a lump sum of fixed amount to the designated beneficiary according to the contract.

This type of insurance is similar to term insurance, but the term of insurance is different - one is the term of insurance and the other is life insurance.

Therefore, fixed whole life insurance is suitable for people who need long-term protection against property inheritance.

In situations where ownership of property may lead to disputes, it provides a stable financial business income for homeschooling and ensures that property inheritance is in place.

You can also think of it as a house in your name that you can inherit to your children when you die. The increase in whole life insurance is more focused on investment banking.

This is one of the more popular types of insurance in recent years. If the insured person dies, the insurance company will pay a certain amount of money to the beneficiaries; however, if the insured person dies, the insurance company will pay a certain amount of money to the beneficiaries.

If the insured dies, the insurance company pays the beneficiaries a certain amount of money; however, the insured can also receive cash value for use if we live, by obtaining a loan for the value of the policy, or if the company surrenders the policy in accordance with the provisions of the policy in our country.

Unlike fixed-rate life insurance, incremental life insurance usually has varying amounts of coverage that increase each year based on the cash value of the policy. Therefore, this type of insurance is suitable for people who need to invest and receive insurance proceeds at the same time. Understandably, the longer you buy a home, the higher the price of the home, and if you continue to use the money, you can surrender the policy for a cash value gain. Because we usually get more questions about the difference between annuities and incremental whole life insurance companies, it's possible that many people are confused about which is better, life extension or annuities? It's not complicated. Both annuities and life insurance are deposit insurance.

We give our money to the insurance company first, and the insurance company invests it with our premiums.

When we need the money, we get it from the insurance company.

The premiums are not wasted, so the money we get back will include our share of the insurance company's profits. This portion of the return is certain.

Whether or not to buy an annuity insurance policy or to increase your life insurance income is a demonstration.

It is easy to see how much you can get back at any given time (pension/cash value).

Moreover, the figures determined by these questions are guaranteed to be honored because they are written in black and white in the economic contract after the business is insured.

The difference is concentrated in 4 blocks:

The way of receiving money is different:

When the annuity insurance when you can receive money, the policy is set. How much money can be claimed, but also enterprises to determine when the insurance, extended annuity insurance company can be carried out every year automatically call us, you want to take more, less, do not take, can not. The certainty and discipline are very strong, but it lacks a bit of flexibility in time.

But with incremental life insurance, there is no need to agree to receive the money, and the insurance company can't send us the money on its own initiative. After you buy it, the money you put in is converted to cash value, which then rises year after year. When you want to use the money, you get a cash discount. You decide for yourself which year you get it and which year you don't, which year you get more and which year you get less. Flexibility is high, but discipline is low.

Different speeds of payback

Two annuities and an augmented whole life insurance policy, same 30 year old male, $100,000 annual contribution, total investment of $1,000,000 for 10 years.

The annuity is not paid back until the 17th year, the

And B Incremental Life Insurance is paid back in the 8th year.

This matches the main features of the product. If the annuity insurance does not have a quick payback time, it is inevitable that someone may go to surrender the policy and have no pension to use in old age, so it has to be constrained to death.

Of course, there is a solution to the funding problem.

Annuity insurance and life extension both support policy loans. Lend up to 80% of the cash value. Assuming the current price is $1 million, you can borrow $800,000 for up to 6 months.

Insurance companies lend at lower interest rates than banks (e.g., Hongkang Life Insurance is only 4.5%) , and there are no credit checks, and the loan arrives in 3-7 business days.

Online education can be operated, as simple as bank access;延期年金 loan company during the policy benefits are still valid. It is very suitable for Chinese SME business owners to do temporary capital turnover.

The actual benefits are different

Annuity insurance, such as pensions, because live as long as possible to receive as long as possible, so the actual economic returns of good products, can reach 4% +. While the incremental life, a good product, will only bring infinitely close to 3.5%.

The person who receives money is different

If you buy it yourself, the annuity insurance, increasing people's life is their own money, there is no difference.

But if you buy it for someone else, for example, you are the insured (responsible for paying the premiums), it is for your child (insured), then the annuity insurance is the insured's child to collect the money, others can not be collected on behalf of. This feature is quite suitable for divorced friends.

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