By Marilyn Clark
In my business as a licensed insurance agent for over 30 years, I have written many times about Safe Money with a focus on fixed annuities.
I would like to share with you a very special client of mine, she is 92, I will call her Mary.
“Mary” wanted to help her son who was in his 60’s and having cash flow issues. He had Social Security, worked in real estate but cash flow was irregular. Mary had $100,000.00 to contribute to his well-being but thought a monthly check would be more prudent than a lump sum. She wanted an income guaranteed for 10 years fixed. She felt 10 years was sufficient to allow her son enough time to get his house in order.
Her son was the heir to her estate and she anticipated by then he would inherit everything else. She deposited $100,000 and the insurance company issued a contract to pay out principal and interest over a 10-year period certain every month to her son. In the event her son predeceases her, Mary made herself the beneficiary. This is actually what happened. He had the income for 4 years and passed away. She is receiving the same income for the balance of the 10 year guaranteed time period (6 years.)
This type of annuity is called an Immediate Annuity. A lump sum is exchanged for income, income that can be customized for any time period, even lifetime.
These are guaranteed contracts. Once the account is issued, the income is deposited automatically into the checking or savings account of the individual, using the benefit of direct deposit (just like your social security check.)
In my Mary’s situation, she indicated how much money per month she wanted for her son and we merely priced out the best offer for her. Her son was thrilled and it made his life much easier for the timeframe in which he lived to receive it.
Maybe the benefits of guaranteed income could be important to you? Please contact me for information about any annuity topic.