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below article to forward, reprint, distribute, use for ezine, newsletter, website, offer as free bonus or part of a product for sale as long as no changes are made and byline, copyright, and resource box below is included. ---------------------------------------------------------- Love thrill of risk? Invest in an Annuity!By Stephen Bucaro
With stock market in steep decline, people are looking for safe places to invest their savings. Many banks and investment companies are pushing annuities. Annuities offer a higher interest rate than CD's, but are they safe?
You could view an annuity as a tax deferred CD. You don't pay taxes on interest until you start drawing from annuity. But there are some important differences between an annuity and a CD.
An annuity is a product offered by an insurance company. With giant corporations like Enron, Kmart, Worldcom, and United Airlines going bankrupt, can you guarantee that insurance company won't fold, leaving you with nothing? Insurance companies are insured by re-insurers, like General Re. But it seems no matter how large a company is, you can't be sure it won't fold. The bankruptcy of a large insurance company might cause re-insurer to collapse along with it.
Bank CD's are insured by Federal Deposit Insurance Corporation (FDIC) for up to $100,000 per bank. The FDIC is a branch of U.S. Government, who, as you know, are people who print money. If they go bankrupt, we'll have more to worry about than just losing our savings!
A new type of annuity called a charitable gift annuity has come on market recently. These are issued by charity organizations. You give your money to charity, you receive a tax benefit, and in exchange charity promises you a fixed payment for life. Unfortunately, this scheme has become a mode of operation for con artists.
