easysurfer
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Jun 11, 2008
- Messages
- 13,173
Understandable to me. IN GENERAL (yes, there are many variations in life insurance and annuities) - Life insurance you pay a small amount of money over a long period of time that will yield a huge return if the unlikely happens. Life insurance is buying an estate in the event you die before you generate an estate yourself.
With an annuity you pay a huge amount all at once that you can never get back hoping the payout will match or exceed what you could do investing on your own, knowing that if pass early actuarially other annuitants you don't know will get the benefit of your funds. An annuity is future income, usually for an indefinite period.
Again, IN GENERAL...
I suppose another way to say it is that upfront for life insurance the money at risk is the company's but for an annuity upfront the money at risk is the annuity purchaser.
So psychologically, it seems putting smaller payments for life insurance is a more certain bet so the concern of an insurance company going belly up is probably dimished when purchasing life insurance (after all, initially, it's mostly playing with the insurance company's money and not your own).
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