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December 2010

Life insurance and annuities: What's the difference?

Although both life insurance and annuities may be appropriate components of your short- and long-term financial strategy, they serve different purposes.


Life insurance is designed to help provide financial protection for your beneficiaries, while annuities help provide a hedge against outliving your retirement savings.

Plan and purpose
The main purpose of life insurance is to help your family meet ongoing financial needs previously met by your income. Life insurance can help fill the financial gap left in the event you are no longer there. Common types of life insurance include whole life, term life and universal life. There are many different options and riders with each type.

Annuities are designed to help individuals convert assets into an income stream. In exchange for a purchase payment, or series of payments, the insurance company guarantees to pay a stream of income in the future. Although all guarantees are based upon the claims-paying ability of the issuing company, annuities are designed to help provide income that can last as long as you do.

There are several types of life insurance, each with a variety of options and riders available. There are different types of annuities, as well. What's best for you? It depends on a number of factors such as your risk tolerance, time horizon and individual circumstances. So click here to get a quote or to find out more about the many options.

Life insurance and annuities issued by Farmers New World Life Insurance Company, Mercer Island, WA 98040.

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