Can I Get A Cash Advance From A Variable Annuity?
Can I Get A Cash Advance From A Variable Annuity? You can cash out a variable annuity, but the penalties make this a poor decision.
Variable annuities are contracts between insurance companies and individuals. They are long term security investments that allows investment in sub accounts similar to mutual funds and are designed for retirement. Some of the benefits of these types of investments include the ability to guarantee a lifetime income, investment management by a by a professional, deferred taxes, diversification and flexibility for your investment and a residual death benefit.
The annuity -
All of the claim paying ability of the insurance company that issued the policy is what backs the payout guarantee, so it is a good idea to research the issuing company’s finances and payout history. As with any investment, there are risks when investing in a variable annuity, these include loss of your principle. In addition to that, your death benefit payout might be affected by market fluctuations.
Your money –
Can I Get A Cash Advance From A Variable Annuity? The short answer is yes. The majority of people are unaware that it is possible to get cash for their annuity payments. For those who have an immediate need and can not wait for the annuity payout, cashing out all or part of an annuity is a viable option. You can use this money for any reason, although if there is another way to raise the money to meet your needs, that would be better than cashing in your future.
The drawbacks -
Can I Get A Cash Advance From A Variable Annuity? While the answer is yes, there are some drawbacks to early withdrawal of all or part of your annuity. The first restriction involves the surrender period. This is the period during which you are not able to withdraw funds without being penalized. Withdrawals now will reduce your death benefit later. Last but not least, withdrawal of taxable amounts are subject to taxation if withdrawn prior to age 59 ½. So, Can I Get A Cash Advance From A Variable Annuity? Yes you can, but is it worth it?
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