An annuity is an effective financial planning tool that when used for the correct purpose, and in the correct situation, can serve tremendous worth to the annuity purchaser. It is a contract between you and a third party whereby in trade for making a stack payment, the insurance agency promises to do four essential things such as provide an income for lifetime or a certain period of time, asset growth or accumulation, a death benefit, long term care benefits. There are only two types of annuities: Fixed and Variable.

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