Insurance Articles

It’s also a time to get the recreational vehicle (RV) out of the driveway and onto the open highway.

Whether you’re heading out on a multistate tour in a full-size RV or on a weekend retreat with a tiny pop-up camper, learn how to stay safe and have fun at the same time by following some simple tips on properly insuring a recreational vehicle.

1. Keep It Clean, in Good Repair and Legal: RVs require a tag and title before they can be taken on the road. Routine maintenance not only helps reduce operating costs, but also ensures a safe and worry-free trip. Remember, lack of maintenance can lead to dangerous situations, ranging from blown tires to side-of-the-road breakdowns.

2. Check Your Current Insurance: Before setting out on a road trip, be sure to verify the limits of your existing automobile policy, especially if you intend to tow a smaller RV with your regular automobile or rent an RV. Don’t assume the RV is covered under a traditional plan. It’s also a good idea to double-check liability limits, coverage for personal belongings and geographic limitations before heading out on the highway.

3. Ask About Options: RV owners often find optional insurance riders more affordable when purchased through their primary plan. Ask about total loss replacement, roadside assistance, emergency expense coverage, vacation liability, attached accessories and other options. It’s a small price to pay for the peace of mind in knowing you are protected in the event of an accident or emergency, especially when far from home.

4. Consult With a Specialist for Full-Time RV Living: Full-timer coverage, hail, flood, fire, theft and other issues for those who consider their RV a home away from home are especially important. Be sure to speak with your insurance agent to select the best options for your individual situation while taking into account other means of transportation, total investment in the RV and lifestyle choices.

With employers cutting back on labor and benefits, supplemental health insurance has taken on new importance to individuals.

Supplemental health insurance policies are generally less expensive than regular health insurance plans. Although the lower cost is directly attributable to the lower benefit amounts, these benefits can make a big difference.

For example, in addition to medical and hospital coverage, supplemental health insurance policies pay fixed cash benefits for emergencies, outpatient services and preventive care. There are also policies that cover benefits for specific conditions such as cancer, heart attacks, strokes and other illnesses. Supplemental disability income policies help guard against the loss of income due to illness or injury by providing a monthly benefit to help pay bills. And supplemental long-term care insurance policies can provide coverage for payment of nursing homes, assisted-living facilities and adult daycare costs.

Unlike most regular insurance policies, supplemental insurance plans pay benefits directly to the policyholder. And the benefits are paid in cash to be used at the insured’s discretion. Benefits are also paid in addition to other insurance coverage and regardless of pre-existing conditions.

Although the maximum coverage is generally less than that of regular insurance plans, supplemental policies can be a nice addition to coverage with traditional insurance plans.

In uncertain economic times it might seem odd to turn to life insurance as a financial security blanket.

But there are some very good reasons you might want to take a second gander at this often-overlooked fiscal planning tool.

Life insurance can, in fact, provide you with the security you seek.

The following are some things to think about when considering life insurance.

Financial Protection for Your Family in Their Hour of Greatest Need

The loss of a loved one is never an easy thing to get over.

However, the financial burden can turn a bad situation into disaster.

Life insurance can ensure that your family is able to replace a lifetime of lost income.

Low-Cost Loans

One of the benefits of some whole life insurance policies is the ability to obtain low-cost policy loans even when the bank says no.

If the policy owner borrows from the policy, the cash value is used as collateral and interest is charged at the rate specified - or described - in the policy.

Catastrophic Cash-Out

An increasingly popular option among many forms of life insurance is the ability to obtain a cash-out equivalent in the event of a catastrophic illness or injury. It’s one more way life insurance can be there when you or your family needs it most.

Leave a Legacy

Despite their best efforts, many people find it difficult to leave a financial legacy to help their children and grandchildren.

Retirement accounts and the stock market have taken a beating in recent years.

As a result, more than a few portfolios have also taken dramatic hits.

Rather than trying to time the market, more people are locking in a true legacy through the purchase of life insurance.

When designing a long-term care insurance policy, there are a number of important factors that will determine how - and when - the benefits are paid out.

One factor is the length of coverage and how many months or years the plan will pay before benefit dollars run out.

Another factor is the policy’s elimination period, or the number of days the policy owner must pay for care before the insurance benefits begin to pay.

Many insurance companies have also designed their long-term care plans to pay benefits based on either a reimbursement or an indemnity model.

Depending on the type of plan, this factor alone can make a big difference in the ultimate benefit received by the policy owner.

Reimbursement long-term care insurance policies, sometimes referred to as expense-incurred plans, allow the policyholder to choose the benefit amount when they initially buy the policy.

This type of plan reimburses the insured for actual expenses incurred, up to a fixed dollar amount per day, per week or per month.

For example, if a policy was originally designed to pay $100 per day in benefits but the actual charges incurred were $80, the actual charges of $80 would be paid and the additional $20 per day amount would go back into the policyholder’s pool of dollars to be used at a later time.

Indemnity plans will pay the policy owner a fixed amount of dollars per day up to a fixed amount of benefits, regardless of the expenses that are incurred.

Therefore, if the insured has a plan that is designed to pay $100 per day, but the care received actually only cost $80, the policy owner would still receive the full $100 from the insurance company.

Not all insurance companies offer both reimbursement and indemnity options on their long-term care policies. It is therefore best to check with each company prior to purchasing a long-term care insurance plan.

Retirees who have modest savings and are worried about running out of cash might be good candidates for a fixed-rate annuity.

Annuities

An annuity is purchased with one or several payments and has a payout plan that starts immediately or at some point in the future.

Fixed-Rate

If the annuity has a fixed rather than a variable rate, you’ll be guaranteed a specific income stream for life when the payout does start.

That can offer peace of mind if you’re someone who’s worried about running out of money.

Such a scenario guarantees you will have a certain level of income whether you live to 80, 90 or 100.

If you’re in good health and have a long life expectancy, you will probably get the greatest bang for your annuity buck.

Risk

But there is a downside.

No investment is without risk, and that includes fixed-rate annuities.

There is little doubt that fixed-rate annuities can provide you with peace of mind, especially if you’re retired.

In spite of that, however, fixed-rate annuities can still be a tough sell these days, when interest rates are low and many investors have rediscovered their appetite for riskier types of investments.

Many retirees also don’t like the fact that the money spent on an annuity with no guarantees is gone when the annuity holder dies, leaving nothing for heirs.

Variable Annuities

As a result, you may want to consider keeping a portion of your retirement savings in variable annuities or in mutual funds in an attempt to generate higher returns.

Your financial advisor can provide you with more information about what might be suitable for you given your individual financial circumstances and goals.

One of the biggest risks of your financial plan might be outliving your assets - and inflation is a big part of that. If you’re entering retirement and are worried about inflation, you might want to consider little-known products called immediate-payout and inflation-protected (or inflation-indexed) annuities.

Immediate-Payout Annuity

An immediate-payout annuity is simply an annuity that is purchased with one payment and has a payment plan that starts immediately.

Inflation-Protected Annuity

An inflation-protected annuity is similar to an immediate-payout annuity, but its payments are indexed to the rate of inflation.

While inflation-protected annuities are common in other countries, most notably the United Kingdom, they are less well-known in the United States. However, they could be valuable for someone who is concerned that rising prices will cut into future purchasing power.

Keep in mind that while inflation protection might sound attractive, it can add to an annuity’s costs. Another option for an  investor who is concerned about inflation would be to invest a portion of his or her assets in an annuity and a portion in stocks and bonds.

Your financial advisor can provide you with more information about what might be suitable for you given your individual financial circumstances and goals.

Determining the right deductible when purchasing auto insurance can be difficult. It’s tempting to reduce your rate by increasing the deductible to the maximum possible, but taking on more risk than you are able to assume can place your entire financial future at risk.

Ask yourself the following questions to determine the right level of coverage for your financial comfort zone:

1. Do You Have a Healthy Savings Account? Before opting for a high deductible, be sure to set aside enough savings to cover the full cost of the deductible should an accident occur. Many people find it helpful to start slow, gradually increase the deductible, and put the savings in the bank. Once sufficient funds have accumulated, then it’s safe to increase the deductible once again. The reduced premium often pays for itself within the first year.

2. Are There High-Risk Drivers in the Household? A healthy savings account can become quickly depleted if used frequently enough, so households with a high-risk driver may prefer a lower deductible in case of multiple accidents.

3. Do You Drive an Older Car? Remember, the purpose of auto insurance is to pay for repairs so you don’t have to, but people who drive older automobiles may not be as concerned about small dings or dents. In fact, some repairs may cost more than the entire depreciated value of the vehicle. It’s often more affordable to opt for higher deductibles and then use refurbished parts when obtaining repair quotes.

Does your umbrella insurance policy cover the gaps that you need covered?

If you’ve taken the time to inquire about the purchase of an umbrella insurance policy, chances are you already understand the need for an excess liability policy. In today’s litigious society, the odds of being sued steadily increase in proportion to the personal and professional assets you own.

To protect and preserve their personal assets against a potential lawsuit, more people are turning to affordable umbrella insurance policies. The typical policy picks up where traditional automobile and homeowners policies leave off. For just a few hundred dollars, excess liability from $1 million up to $10 million can be purchased.

The first step to understanding if your umbrella policy covers the gaps is to make sure the limits meet your specific level of need. Experts suggest that you obtain a level at least equal to current net worth. Young professionals may opt for substantially higher levels due to increasing earning potential.

The second step is to evaluate personal and professional risks. For example, do you hire in-home domestic help such as a nanny or lawn care service? Perhaps you volunteer your professional services to a local charity organization or provide the use of assets to others. While each of these situations is certainly acceptable, it’s important not to inadvertently expose yourself to financial ruin due to a lawsuit arising from an accident or injury.

The third step is to determine situational risk. For example, do you own vacant property that could be subject to increased risk by accident or injury? Do you engage in high-risk hobbies that could injure others?

Something as simple as children playing on an unimproved field could result in a serious accident that exceeds the coverage provided. Sports-related accidents, dog bites and even ill-timed antics of children also place homeowners at risk for excess liability claims.

Finally, it’s important to carefully read and review the limits, exclusions, additions and omissions when purchasing a new policy or renewing an existing policy.

The concept of health insurance co-payments can be confusing to many people. The following will help you understand the issue:

Co-pay: A co-payment is a flat fee or portion of a medical bill that becomes the financial responsibility of a patient when seeking medical services. For example, a patient may have to pay $25 for each visit to a general practitioner.

Co-insurance: Co-insurance and co-pay are often used interchangeably by health care consumers, but they aren’t exactly the same thing. To be precise, co-insurance is the percentage of a medical bill that is the responsibility of a patient after meeting an annual deductible.

Maximum Out-of-Pocket: The maximum out-of-pocket expense is the annual maximum amount the policyholder is required to pay before the health insurance policy provides 100% coverage during a calendar year. Co-payments may or may not count toward the out-of-pocket limit.

There are a few essential questions to consider when speaking with your agent:

1. What is the co-pay in network versus out of network for office visits, out-patient providers and hospitalization?

2. Which co-pay situation applies when my physician visits me in the hospital?

3. Are medications included or excluded? Is there a separate limit or deductible?

4. Can the co-pays be used to satisfy one another

The decision to purchase life insurance is one of the most important steps the average person can take to protect the financial future his or her family or future family.

Unfortunately, research indicates that the majority of people underestimate their true life insurance needs.

With a bit of planning and preparation, though, it’s possible to avoid these common errors and purchase a policy that provides long-term protection at a great price:

1. Inflation

By far the most common mistake many people make when trying to determine how much life insurance to buy is to forget about inflation. Using a modest inflation rate of 3% annually, the purchasing power of most policies will buy half its current value.

To fully protect against the ravages of inflation, experts suggest building in an additional layer of protection by doubling the estimated cost of living required later in life.

2. Family Growth

Young couples may have few resources and high expenses while raising children, so it’s essential to plan for future college expenses, day-care and even additions to the family.

The cost of college is one of those expenses that has outpaced than the rate of inflation, so it’s important to plan accordingly. Remember, life insurance is a long-term purchase, so plan for unforeseen circumstances early. To ensure that college-bound children have sufficient resources, estimate college tuition with a 5% to 10% inflation rate.

3. Medical and Nursing Care

Older couples often have the advantages of retirement plans and a lifetime of savings to fall back on, but that doesn’t mean they are without worries of their own.

The escalating cost of medical or skilled nursing care can leave a surviving spouse facing bankruptcy just when he or she needs help the most.

To ensure that elderly spouses have sufficient resources, estimate medical and skilled nursing care at an 8% to 12% inflation rate.

Every year, millions of Americans learn the hard way that they do not have adequate health insurance coverage. Sadly, it’s often a situation of too little information too late.

More than 20,000 Americans die each year because they cannot afford basic medical care, medications or surgery. Surprisingly, it’s not just the uninsured who are at risk. Consumer reports indicate that four out of 10 people do not have adequate coverage levels.

The following information will help you determine if you have enough coverage:

1. What Is the Lifetime Cap on the Policy?

When shopping for health insurance most people simply look at annual premium rates and deductibles, but that can be a big mistake. Most health insurance policies have lifetime limits or cap rates that limit the total payout on the policy. Once that level is reached, coverage stops. Many low-cost, state-sponsored policies have a cap rate of only $50,000 annually. Experts suggest at least $1 million to $5 million per policy. Given the rapidly rising cost of medical coverage, the difference can literally mean life or death for someone facing a catastrophic accident or serious illness.

2. Are the Doctors, Laboratories, and Imaging and Other Providers In Network?

Most people realize the need to verify the hospital is in network but don’t realize the individual providers may not be. Even for the same surgical procedure it’s not uncommon to find that a surgeon, anesthesiologist, lab and even imaging studies are covered by different plans. It’s important to verify that all providers are covered by the plan in order to avoid costly surprises later.

3. What’s the Worst-Case Scenario?

Take time to add up the total cost required to use the policy in a bad year. If premiums, deductibles, co-payments, medications and all other out-of-pocket expenses exceed your savings, then chances are you are underinsured. Remember, health insurance is one of the most important policies available, but it works only if you can actually afford to use it.

With the market declines of 2008 and 2009, many investors are now asking themselves whether or not they should think about rolling the money they have in mutual funds and individual retirement accounts into variable annuities.

Annuities, particularly variable annuities, can play an important role in retirement planning.

But buying a variable annuity to protect your retirement savings from market declines may not be the best investment strategy.

With a variable annuity, money is invested in a subaccount of securities.

You receive payments that are based on the performance of the securities in the subaccount.

So if the market declines, the variable annuity is affected in the same way as a mutual fund.

It goes down in value.

Variable annuities often have guarantees that offer some additional security.

However, in many cases buyers don’t understand the guarantees.

Thus, you might not want to move any of your money into a variable annuity without first learning exactly what the guarantee is and what it costs as well as how much you’ll be paying in total fees, including surrender charges.

It is best to consult a professional financial advisor who can help you with this process.

Some new variable annuities are available to replace those that insurers found too generous to customers during the financial crisis.

However, only you can decide if one is right for you.

A variable annuity is a contract with an insurance company.

Simply put, you give the insurance company a sum of money now, and the funds are invested in a sub-account of securities. At some later date, you receive payments that are based on the performance of the securities in the sub-account.

However, for an additional fee you can buy downside protection, which means that if the securities in the sub-account perform poorly, you can exchange the decreased sums for lifetime payments of a guaranteed minimum amount.

How Does it Work?

Downside protection features usually involve a guaranteed minimum benefit base used to calculate your annual income if you exchange decreased sums for lifetime payments of a guaranteed minimum amount.

The problem for insurers in 2008 and 2009 was that the benefit base was reset at regular intervals - annually or more often - to incorporate gains from the owner’s overall annuity.

Many also promised high minimum annual gains, in some cases 7%. Those guarantees strained insurance companies after the market contraction of 2008 and 2009.

As a result, many insurance companies took them off the market.

Now, a number of new downside protection features are being offered.

Many promise minimum annual gains, albeit lower ones such as 5% instead of 7%.

Some make annuity holders in their mid-to-late 60s eligible for annual income of 5% of the base.

As appealing as that may sound, you’d be wise to know the rules before you invest, and consider all the pros and cons of annuities, including fees.

Small-business owners frequently encounter increased liability concerns during the course of day-to-day business.

So do start-ups, not-for-profits and others engaged in business.

In most cases, general liability coverage provides a level of protection suitable for most unanticipated situations.

However, it might fall short in some instances.

General liability coverage often specifically excludes criminal activity or other omissions of directors or officers.

Liability coverage for directors and officers, commonly referred to as D & O coverage, bridges the gap by protecting both directors and officers as well as the organization itself from damages.

The liability coverage also protects officers and directors from the defense fees associated with criminal or regulatory allegations.

D & O insurance is especially important when attempting to attract quality directors and officers into companies that deal with cutting-edge areas of research and development.

It’s also important for attracting them to:

Industries undergoing rapid legislative changes

• Companies that routinely do business in several states or a global setting
• Companies with employees where relationships could potentially be considered a conflict of interest
• D & O coverage provides some peace of mind for the individual directors or officers.

It also provides a valuable level of additional protection to insulate individuals from personal loss in the event of a claim.

Contrary to popular opinion, D & O insurance does not encourage malfeasance since it excludes deliberate acts of fraud or intentional illegal activity.

Instead, it provides protection required to operate in complex industries without fear of reprisal should an accidental omission, mistake or other oversight take place.

With more than 95% of Fortune 500 companies citing D & O insurance as a core component of corporate insurance, it is no longer considered an “add-on” policy.

In fact, given the number of corporate scandals and an increasingly litigious environment, D & O insurance is increasingly considered to be imperative for companies of any size that plan to:

• Seek venture capital funding
• Initial public offering
• Other investment opportunities that involve shareholders

Research indicates that more than 30% of all companies can expect at least one claim against directors or officers.

Average defense costs of a claim exceed $1 million.

Employee benefit liability insurance is increasingly being seen as a smart step for small-business owners.

In fact, given the rapid rate of state and federal mandates likely to impact employee benefit plans, experts consider it a prudent way to protect against inadvertent errors, omissions or other acts that could result in a lawsuit.

There are two key components to keep in mind when considering employee benefit liability coverage. They are the “administration” side and the “employee benefit program.” The administration side provides protection for the counsel and interpretation of benefits, record handling, enrollment, termination, cancellation and other administrative duties connected to the employee benefit program. The employee benefit portion pertains directly to the benefits provided to employees, including life insurance, health insurance, pension plans, stock options and other benefits.

Should an error or other unintended consequence arise that results in a loss or claim from an employee, former employee, family member or beneficiary then the policy would take appropriate steps to represent the company or pay the claim in the event of an adverse ruling.

It is essential for business owners to fully understand - and implement - a proper administrative procedure to handle employee benefit plans. It is equally important to remember that employee benefit liability insurance does not take the place of fiduciary liability coverage. Speak to your agent about how to best protect your business with employee benefit liability insurance in combination with existing coverage options.

Insurance tips offered by most companies usually focus on the need to protect your property against hazards such as fire, accidental injury or other common perils. But few homeowners spend enough time selecting the right options for their personal property.

In fact, many assume that the automatic content coverage that comes with a homeowner policy is more than sufficient. Unfortunately, this isn’t always the case.

Failure to select the right coverage can be a costly mistake that may not become apparent until a catastrophic loss has taken place.

When it comes to protecting your personal property there are two main types of coverage available. They are Actual Cash Value (ACV) and Replacement Cost (RC). In addition to ACV and RC coverage, riders or additional policies are commonly used to insure high-value items. It’s a good idea to speak with your agent to determine the right type of policy for your individual situation.

ACV is the amount it would take to repair or replace your personal property, minus the depreciation. For example, expensive electronics rapidly depreciate and may be worth far less than the original purchase price. ACV is typically more affordable and therefore a good option for budget-conscious individuals.

RC is the amount it would take to replace or repair personal property with a similar style and quality. Many homeowners opt for RC coverage. Although RC coverage tends to cost a bit more, it is helpful when the value of an item has depreciated significantly.

Extended RC coverage provides additional protection by insuring an item up to 125% of its value, making it an excellent choice during periods of rapid price increases or economic inflation.

Guaranteed RC is the most expensive type of policy. It guarantees coverage to repair or replace an item even if it’s above the policy limit. There are typically limits to the total value of any single item, so be sure to ask your agent whether it would be more beneficial to obtain a rider or endorsement instead.

If you’re planning to purchase a new car, be sure to obtain insurance well in advance. Even if your policy does provide automatic coverage, it may not be sufficient to cover the cost of repairs for a more expensive vehicle. Following are some tips to help you get the right insurance when making a purchase.

Call for Quotes in Advance: Obtaining a quote in advance for the make, model and age of the vehicle will provide a full picture of the total cost of ownership for a new car, and it’s often possible to have a policy put into effect before driving the vehicle off the lot. Although most underwriters extend coverage to new cars purchased, it’s better to be safe than sorry. Verify that automatic coverage is in effect as well as the number of days required for notification.

Adding or Replacing: Tell your agent whether you will be adding to or replacing the current policy in order to obtain the best rates and coverage options. If you are replacing the current policy, most underwriters allow 14 to 30 days for notification. Premium adjustments are frequently required and may leave you underinsured if the new vehicle is involved in an accident.

Fill That Gap: Buying a car or truck is typically the second largest expenditure most people make, so it isn’t surprising that car loans or financing is necessary. Unfortunately, it’s sometimes possible to owe more than a car is worth after driving it off the lot. To avoid large gaps in coverage, most underwriters offer “gap insurance” designed to pay off large loans in the event of a major loss.

It’s a well-known fact that individual choices can lead to increases or decreases in your life insurance premiums.

However, few people realize the full extent of how seemingly simple lifestyle decisions can dramatically impact policy rates. Of course, most people expect to see higher premiums if they smoke or use tobacco. But what about if they scuba dive?

Depending upon the underwriter, everything from healthy outdoor activities to high-risk situations such as substance abuse may double, triple or even quadruple life insurance premiums. Other common lifestyle situations that may impact premiums include:

Driving Record

Whether you feel the need for speed, enjoy taking a motorcycle out on the open road for weekends or made a bad decision to drive after drinking, chances are your individual driving record could have a major impact on premiums.

Recreational Pursuits

Skydiving, scuba diving, being a part-time pilot, racing a bike, skiing and even mountain climbing might be great ways to stay in shape but statistically speaking they tend to increase the odds of an accident or an early death.

Travel

It should come as no surprise that routine travel to high-risk areas - as opposed to relatively safe domestic destinations like Disney - is more likely to result in expensive life insurance premiums.

Smoking, Drinking and Other Vices

Although you might be willing to take your chances when it comes to smoking, drinking and other vices, the insurance underwriter isn’t usually as inclined.

But don’t assume it’s impossible to obtain great rates even if you engage in less than healthy habits.

Depending upon frequency and duration of particular habits and other individual situations, life insurance agents are often able to provide very cost-effective and affordable life insurance quotes.

Medical evacuation insurance may not be at the top of your priority list when traveling, but for a growing number of people it’s fast becoming a “must-have” item.

Also known as a “medevac plan,” this once relatively unknown form of insurance is no longer relegated to the jet-set crowd. Globe-trotting baby boomers, international sporting enthusiasts and even business executives who routinely travel overseas are increasingly concerned about the ability to return home for medical treatment.

Medevac plans fill a much-needed gap in coverage by providing emergency services such as air evacuation, long -distance ambulatory services and other necessary medical transportation.

The insurance should not be confused with traditional travel policies. In fact, most travel insurance specifically excludes medical evacuation insurance, which may result in undue financial distress to travelers who experience a serious injury or illness while out of the country.

Transportation to medical facilities can be quite expensive, especially in situations that require specialized technology, nursing assistance or other care. It’s not merely a question of obtaining a new airline ticket. Highly trained medical staff and extensive safety procedures may be required to transport a patient back home in time to obtain treatment. Language barriers, out-of-the-way locations and lack of local assistance may also complicate an already bad situation.

By obtaining medical evacuation insurance, international travelers can have peace of mind in knowing help is just a phone call away. Multilingual support, specially trained pilots and clinical staff are available throughout the world at any time of day or night.

Most investors understand that the basic benefit of fixed annuities is that they offer the potential for a guaranteed payment. Regardless of whether the economy or markets are performing well or poorly, an annuity pays a minimum amount of income every month. But just how much money should you put in an annuity versus other investments?

When it comes to fixed annuity allocation, some financial advisors recommend that you put no more than a third of your assets into annuities. Others recommend that you limit it to three-fourths of your assets. But that’s a big difference.

The reason for the discrepancy is that some financial advisors feel they can get better returns for their clients by investing in a diversified portfolio of securities. But that’s a harder sell today than it used to be, given the huge losses the stock market has experienced in the past few years.

So how much money should you allocate to a fixed annuity? As is the case with any element of a portfolio, fixed annuities are best used in moderation. That’s because they’re a compelling way to guarantee a certain amount of fixed income in retirement. If overdone, however, they can rob a portfolio of flexibility.

No single answer fits every investor, but one guideline is to use an annuity to cover your basic living expenses. You may have to put a significant part of your nest egg into the annuity to receive the amount you need, but you’ll know it will be there, through good times and bad.