Fixed Annuities

Fixed Annuities issued by a Swiss carrier, better known as “Swiss Annuities” have been around for over 30 years. They are and remain one of the best insured savings structures on the planet.

Given that no insurance company has ever gone bankrupt in Switzerland, nor reneged on its obligations, the creditworthiness is probably somewhat better than currently the US government. As a capital preservation, asset protection and pure savings instrument, Fixed Annuities have no equal.

Fixed annuities are available in a variety of currencies, including Swiss Francs, Euro and US dollar. They are also available with various deferment periods. There are also special solutions available, for example the gold backed fixed annuity. Whereby you buy a certain amount of gold when you take out the annuity.

What is it and how does it work?

When you purchase an annuity from an insurance company, the insurance company will commit to pay an income for a specified period of time. Whether the income payments start right away, or at a future date, is determined by the type of annuity that is chosen. Accordingly, the two main types are immediate annuity and deferred annuity.

Deferred annuity

A deferred annuity is a type of annuity contract that delays payments of income, installments or a lump sum until such time as the investor elects to receive them. This type of annuity has two main phases, the savings phase in which you invest money into the account, and the income phase in which the plan is converted into an annuity and payments are received.

Immediate annuity

With an immediate annuity income payments start immediately or within one year of purchasing the annuity. You choose whether you want the income guaranteed for a specific number of years or for your (or another person’s) lifetime. The insurance company will then calculate, based on the amount you purchase and the life expectancy of the insured person, the sum of each income payment.

The term fixed means that the life insurance company guarantees the principal and a certain definite return on the investment. A Swiss annuity or Swiss life insurance contract generally involves four parties: The insurance company, which issues the policy and provides coverage to the policyholder in return for payment of the insurance premium. The insured person is the one whose life the insurance covers. The beneficiaries are those persons who are designated by the policyholder to receive the specified capital from the insurer at either a specified date in the future or in case of the insured person’s death, depending on the type of insurance contract.

Bottom line

The more uncertain the times, the greater the value of certainty.

For the most certain of values, transfering your risk to the insurance company through the use of Fixed Annuities is the way to go.