ANNUITIES

 ANNUITIES

It is a contractual relationship agreed between you and a bank or insurance company, in which a payment or a series of payments are made, and in return you will receive regular payments starting now or in the near future.

In the case of insurance, they will provide you with regular income now or in the future in exchange for the payment made now.
Annuities can be purchased in cash or in installments in regular payments as indicated above.
There are 3 types of annuities:
Fixed
Variables
Indexed
Each type has its own level of risk
Fixed annuities which establish fixed payments of payment obligations having a minimum yield which is generally not very high, but safe.
Variable annuities provide a higher return with greater risk.
Indexed Annuities The risk is much greater than the variable but can potentially provide higher returns depending on the state of the stock market at the time.


In the case of banks, annuities are the deposits in a savings account, the mortgage payments on a home.
In the case of an AFP or Pension Fund Administrator, the annuity would be the payment of the pension.
It should be noted that an annuity that provides payments for the rest of a person's life is called a life annuity or life annuity.

Many aspects of an annuity can be adjusted at the discretion of the annuity buyer.
, the payments of an immediate annuity will be made at the end of the payment periods, thus, the interest accrues between the issuance of the annuity and the first payment.
Adequate annuity payments will be made at the beginning of the payment periods so a payment is made immediately at the issuer.
To pay an annuity, you can make monthly, quarterly or annual payments or deposits or any other previously agreed period of time.

The determined or guaranteed annuities are those that have payments during a previously known period.

Contingent annuities are those paid only under certain previously agreed circumstances.

Of all the concepts exposed here, we must conclude in the following:
A person can buy an annuity in cash or on credit, the benefits that the annuity redeems must be clearly arranged in the contract that ratifies said
contractual relationship, upon initiating the payment of the consideration as provided, a benefit of three possible types will be received, fixed, varied, and indexed.
The choice of the type of annuity will depend on the client's choice of assuming a greater or lesser risk and thus consequently a greater or lesser payment of benefits.
We have tried to be as brief and clear as possible on this topic, as technical terms sometimes end up confusing the reader.

Another issue that should be taken into account is the declaration of income from annuities that each country sets special conditions for the process of paying taxes, these vary in the way of declaring income and paying taxes , according to each tax administration.

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