What is annuity insurance? What does it do?

Annuity insurance is a kind of insurance that is based on the survival of the insured. The insurer will pay the insured annuity regularly and regularly within the agreed period in accordance with the amount and method agreed in the contract. . Regarding the advantages of annuity insurance, please refer to this article for a detailed guide: Is it necessary to buy annuity insurance? This guide is worth referring to

Annuity insurance is a financial management insurance and has special functions compared with other financial management tools:

1. Continuous self-management

In today's era of prevalent consumerism, many people are living on a paycheck. Behind their pursuit of a refined life, their wallets are empty. Configuring an annuity insurance will urge us to save a certain amount of money every year for reserves, and there may be losses when surrendering the policy early. It can also constrain the sustainability of the reserves and not easily interrupt them in advance. This is for many people , all have very important practical significance.

2. Clear target protection

Annuity insurance can be divided into pension annuities, education annuities, wedding funds, entrepreneurial funds, etc. according to product purposes. Every family needs to prepare a stable and certain reserve fund for their children's education or their own retirement life, but this reserve fund may sometimes be diverted due to other emergencies. For example, the reserve fund originally intended for retirement is used in advance due to investment or illness. Annuity insurance can realize the special use of funds and provide targeted protection for children’s education, pension and unforeseen risks in the future.

3. Stable asset inheritance

For high-income people, many issues involve asset inheritance. However, the process and cycle of gifting and inheriting assets are also long, and there are various uncertain risks in the process. This is where annuity insurance comes into play. Annuity insurance can designate a beneficiary, which not only ensures the safety and stability of assets and leaves financial support for the development of future generations, but the installment withdrawal of the annuity can also avoid problems such as squandering and over-consumption that may occur when the beneficiary inherits a large amount of wealth at one time. .

4. Diversified asset allocation

Many people now have the concept of family asset management, but in the actual implementation process, sometimes due to limitations of personal experience and information sources and channels, Limitations, it’s easy to put “all your eggs in one basket”. When changes in the economic environment and systemic risks in the industry occur, they will be hit harder.

Participating in annuity insurance can help us better realize the need for diversified asset allocation by introducing an element that is relatively certain and will not be affected by the market and economic environment. And annuity insurance, especially fixed-income products, can help us lock in a safer and more stable rate of return over a longer period of time.

Hope it is helpful to you,

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