An annuity is a long-term savings plan that can be used to accumulate assets on a tax-deferred basis for retirement. They can also be used to convert retirement assets into a stream of income.
- Fixed Interest Annuities pay a fixed rate of interest on the premiums invested in the contract, less any applicable charges. The insurance company guarantees (based on the continued claims paying ability of the issuing insurance company) it will pay a minimum interest rate for the life of the annuity contract.
- Immediate Annuities can be structured in a variety of ways, enabling you to select an income option that best satisfies your unique needs. The five basic income options are:
- Life Income- Payments are made for as long as the annuitant is alive.
- Life Income with Period Certain- Payments are made for as long as the annuitant is alive and if the annuitant dies before the period certain the remaining payments will be paid to the beneficiary.
- Joint and Survivor- This payment option covers two lives. The same payment can be received for as long as either annuitant lives or the payments can be structured to reduce to a specific percentage (e.g. 75%) at the death of the first annuitant.
- Period Certain- Payments are made for a specified number of years, such as 10 years or 20 years.
- Life Income with Refund Guarantee- If an annuitant dies before payments equal to all or a specific portion of the purchase price have been received the beneficiary receives the balance of the payments
