An annuity is a retirement

-planning tool that has two phases: the accumulation phase and the annuitization phase. In the accumulation phase, you give money to an insurance or investment company over a period of time or in a lump sum, and it earns a rate of return. In the annuitization phase, you begin to withdraw regular payments (such as monthly or annually) from your contract until you die.

An annuity has a death benefit, although it is not like one found in a life insurance policy. If you die before you annuitize, your beneficiary will receive either the current value of your annuity or the amount you have paid into it, whichever is greater. For example, if you die when your investments are performing poorly and your account value is less than what you have paid in, your beneficiary would receive the amount you paid in.

Travel insurance

While was formerly looked upon as a luxury, consumers concerned about whether their vacations can be canceled by incidents outside their control, or worried about the quality of medical care in the area they are visiting, now view travel insurance as a good value. Generally, a comprehensive travel insurance policy costs 5 to 7 percent of the price of your trip.

Before buying travel insurance, be sure you don't already have sufficient coverage through your home insurance, health insurance, or as a perk on your credit card if you charged your trip.

life insurance after their youngest child reaches his or her 18th birthday

Couples who believe they no longer need life insurance after their youngest child reaches his or her 18th birthday could leave their family vulnerable to serious financial problems, especially if the sole income-earning parent dies.

Other important factors to consider as a 40- or 50-year-old considering the purchase of term life insurance include the financial condition and physical health of a senior-citizen parent, the financial commitments that may have been made by a two income-earner household, such as a second residential property, and the day-to-day needs of grown children still living at home.

For those looking to move away from term life policies, permanent life insurance—such as whole, universal and variable life—or annuities can be an attractive alternative.