Life insurance companies issue all annuity types, but life insurance and annuities are completely different strategies. Confused?
I'm originally from the deep South, so to put it is easy to understand Southern terminology...life insurance is for when you are dead and annuities are for when you are alive. I always tell people that life insurance will provide the best ROI (Return on Investment) that you will never see. You will never see it because you will be dead! Life insurance proceeds pass tax-free, probate free, and lump sum to the listed beneficiaries on the policy. Now you know why some people look so happy at funerals! My wife and 2 daughters will throw a party when my Learjet hits the mountain because I have a ton of life insurance on myself. No, I don't sell life insurance....but I love the product.
Annuities are for when you are alive. The benefits are for when you are breathing. Yes, there are death benefits with some annuities, but those death benefits do not pass tax free like life insurance...even though life insurance companies issue annuities. Got it?
Annuities primarily solve for 4 things. The easy to remember acronym is P.I.L.L. P stands for principal protection. I stands for income for life. L stands for legacy. And the other L stands for Long Term Care/Confinement Care. If you do not need to contractually solve for one or more items in the P.I.L.L., then you don't need an annuity.
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