discuss the pros and cons and provide examples of each...? Passive investment: A

Question

discuss the pros and cons and provide examples of each...?

Passive investment: Annuities allow for the owner of the annuity to have almost no involvement in any actual investment. The insurance company invests the funds and provides the professional side.

Safety and security: Annuities are some of the most safe and secure possible places for investing your money. The insurance company is regulated by each state's Department of Insurance and in addition each state provides each annuity owner with an underlying guarantee form the State Guarantee Fund. The limits of the guarantees are set by each state and can vary.
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Loss of Control: A downside of investing in an annuity can be losing of actual control over your money. The management of the annuity is placed on the responsibility of the insurance company.

Lifetime Income Option: A solid benefit of investing in an annuity is the option to convert the funds in an annuity to lifetime income. The responsibility for the income falls on the shoulders of the insurance company and not the owner of the annuity. The income cash flow is the responsibility of the insurance company which allows for peace of mind to the annuity investor.

Probate Avoidance: If an annuity has a named beneficiary the proceeds of the annuity at death of the annuitant are paid directly without the need for probate. The funds are received quickly and without delay, fees or expenses.

Explanation / Answer

frequent buying and selling of stocks. These investors are constantly alert to market trends and generally hope to make money in a short amount of time. Passive investors are the opposite, and their focus is in long-term investment strategies. Rather than buy and sell their own stocks or handle their own investments, passive investors use financial planners and brokers.

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