Annuities

An Annuity is a contract between you and an insurance company, under which you agree to make a lump-sum payment or series of payments. In return, the insurer agrees to make periodic payments to you beginning immediately, or at some future date. Annuities typically give you tax-deferred earnings (until you withdraw), and may include a death benefit that will pay your beneficiary a guaranteed minimum amount, such as your total purchase payments.

In general, there are two types of annuities:

A Fixed Annuity earns a guaranteed, minimum rate of interest during the time that your account is growing. The insurance company guarantees that regular payments to you will be a guaranteed amount for each dollar in your account. The periodic payments may last for a specific period (such as 20 years), or an indefinite period (such as your lifetime or the lifetime of your spouse). This is generally a lower-risk, lower return choice.

A Variable Annuity allows you to invest your money (which you contribute in regular payments) in a range of investment options. Your rate of return and the amount you’ll eventually receive can vary, depending on how well your chosen fund(s) performs. You have more choice in a variable annuity, with higher risk, and a potentially higher reward. 

Note: Guarantees are subject to the claims-paying ability of the issuing insurance company. The investment product is subject to insurance related fees and expenses and withdrawals prior to age 59 ½ may be subject to tax penalty.