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Annuity Home

History of Annuities

The Power of Tax-Deferral

A Myriad of Options

Annuity Flexibility

Choices to Consider

Designed for Retirement

Common Benefits

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Introduction to Annuities

Annuities are flexible insurance contracts designed to provide income and help you achieve long-term savings goals. And these are not unused financial vehicles: last year alone, annuity sales topped $200 billion.

Much like a CD is a financial product offered by a bank, an annuity is a long-term product offered by an insurance company. In essence, the same company that insures your home or protects your family may also help you save for retirement.

After making a single lump-sum premium payment, or a series of periodic payments, individuals can then receive regular annuity payments from the insurance company. These payments can be made over a definite period of time, or they can last a lifetime.

Payments to the annuity owner can also be tailored to begin after the contract has been established for a number of years, or they can begin immediately after the first premium payment is made.

Annuity owners even have the choice of receiving regular fixed interest rates (better known as a "fixed" annuity), or having their annuities grow depending on the growth of underlying variable accounts (referred to as a "variable" annuity).

Over time, insurance companies modified and enhanced both types of annuities; however, their basic premise has always remained the same. And because annuities are issued by an insurance company, Congress allows them to grow tax-deferred under current tax laws.

Now for a real in-depth look at annuities, let's begin with a brief history of annuities. You might be surprised to learn how long annuities have been around.

 

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Annuities are not FDIC insured, not a bank guarantee, and may lose value. There is a surrender charge imposed generally during the first 5 to 7 years that you own the contract. Withdrawals prior to age 59-1/2 may result in a 10% penalty, in addition to any ordinary income tax. The guarantee of the annuity is backed by the financial strength of the underlying insurance company.

 

 

 

 

For an annuity quote , click here. For more legal information, click here.

 

 

 

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