Is your current interest rate high enough to keep pace with inflation? YES
Is your principle free from market risk? Yes
Are your interest and principal guaranteed? Yes
Is your deferred interest free from taxation? YES
Do your interest earnings accumulate without affecting taxation of your Social Security benefits until withdrawn? YES
Can you make cash withdrawals without a surrender charge? YES
Can you automatically avoid probate expenses and delays? YES
Does the purchase avoid incurring a sales charge? YES
Is there a provision to provide lifetime income with additional tax advantages? YES
Do you know what your renewal rate may be in the future? YES
Annuities are the backbone of many people’s retirement.
Annuities are promises to pay. The insurance company accepts the responsibility of prudent management and protects the future obligations to its annuitants. Annuities work because they are guaranteed and because they are backed with "real" safe dollars. In the course of American history, including the Civil War, the Great Depression, and our current times, no one has ever lost a penny in an annuity. No one has ever missed a retirement check with funds from an annuity. No beneficiary has ever been denied their benefits with funds in an annuity.
Annuities are safe and they are guaranteed. They are dependable and they are reliable. They are the backbone of our financial well being and our future security. Wall Street and those who have abused the system can never say that.
Fixed annuities are characterized by a minimum interest rate guaranteed by the issuing insurance company. Typically, a minimum annuity benefit is also guaranteed. With a fixed annuity, the focus is on safety of principal and stable investment returns. The fixed-rate annuity is very similar to a bank CD, but typically pays a higher minimum interest rate and offer greater security. You receive this amount no matter if the market goes down, interest rates decline or the insurer has an unprofitable year. They are a secure and safe, no-risk investment which makes them popular with conservative investors and for those who want to pinpoint exact returns on their investments.
Annuities have been in existence for well over two hundred years. The very first mention of Annuities in the United States was the use of these products by the Presbyterian Church in 1740 to provide security for the clergy and widows. Annuities allow you to accumulate tax-deferred funds for retirement and then, if you desire, receive a guaranteed income (this process is called Annuitization) payable for life or for a specified period of time: generally a term of five or ten years.
Annuities are offered by Insurance companies and sold through licensed agents. The insurance company must be evaluated and licensed in your state as does the agent. State insurance commissions scrutinize Insurance companies to ensure they have reserve funds, commonly referred to as State Legal Reserve Pools, in place to protect investors before granting insurance companies licenses. If an insurance company goes out of business other insurance companies licensed in state must assume bankrupt insurers obligations and liabilities. Note that this protection protects fixed-rate annuity holders only, with some protection afforded to variable annuity owners. Annuities are very similar to CDs offered by banks. Just like banks insurance companies offer different rates and returns on annuity investments.
Equity Indexed Annuities
Equity Indexed Annuities (EIAs) are characterized by a contract return that is the greater of an annual minimum rate (typically 3%) or the return from a stock market index, such as the Standard & Poor’s 500 index, reduced by certain expenses and formulas. If the chosen index rises sufficiently during a specific period, a greater return is credited to the contract owner’s account for that period. If the stock market index does not rise sufficiently, or even declines, the lower minimum rate is credited. An owner is guaranteed to receive back at least all principal, if an EIA contract is held for a minimum period of time.
Do you have questions about income strategies?
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