Understanding Annuity 1035 Exchanges
What is a Section 1035 exchange? From time to time, you may consider exchanging (trading) your annuity for another annuity. Exchanging your annuity means that you replace your annuity with an annuity issued by the same company or a different one. You may want to exchange your annuity, for instance, if your present company becomes
Understanding Two-Tiered Annuity
What is a two-tiered annuity? Annuity issuer uses two different interest rates to credit cash surrender value A two-tiered annuity is a type of fixed annuity in which the interest rate credited to the annuity varies depending on the distribution option that you choose. Typically, if you elect not to annuitize
Understanding Long-Term Care Annuities
When planning for the potential cost of long-term care, you’ve probably considered long-term care insurance. But premiums can be expensive, and if you do buy the coverage, you probably hope you never have to use it. The prospect of paying costly premiums for long-term care insurance that you might never use
Understanding Insurance-Based Investments
What is it? Insurance-based investments are those that are issued or underwritten by an insurance company. Examples include annuities and life insurance products. As with any investment vehicle, you should consider several factors before allocating funds, including the types of products available, the advantages and disadvantages of each (including the tax
Understanding Indexed Annuities
An indexed annuity (IA) is a contract between you and an insurance company. You pay premiums in a lump sum or periodically, and the issuer promises* to pay you some amount in the future. The IA issuer also provides a minimum guaranteed* interest rate on your premiums paid. With an IA,
Understanding Guaranteed Lifetime Withdrawal Benefit Annuity Rider
Indexed annuities (also referred to as fixed-index or equity-indexed annuities) and variable annuities can be useful options for retirement savings because interest earnings are tax-deferred until withdrawn. These annuities can also be converted to a stream of income payments that can last for the rest of your life (annuitization). However, annuitization
Understanding Guaranteed Annuity Contracts
What is a guaranteed annuity contract? Guaranteed annuity contract covers multiple annuitants A guaranteed annuity contract (often called a group annuity contract) is a type of annuity that covers a group of annuitants who are usually linked through work or membership in a group or organization. Because multiple annuitants can be covered under one contract,
Grantor Retained Annuity Trust (GRAT)
A grantor retained annuity trust (GRAT) is an irrevocable trust into which you make a one-time transfer of property, and from which you receive a fixed amount annually for a specified number of years (the annuity period). At the end of the annuity period, the payments to you stop, and any
Understanding Fixed Annuities
What is a fixed annuity? Interest rate and principal guaranteed A fixed annuity is an annuity wherein the issuer (usually an insurance company) guarantees both the interest rate paid on invested dollars and the return of principal. The issuer guarantees that a minimum rate of interest will be paid on the annuity, but the actual
Understanding Annuities
What is an annuity? Contract between purchaser and insurance company An annuity is a contract between you (the purchaser or owner) and the issuer (usually an insurance company). In its simplest form, you pay money to the annuity issuer, the issuer invests the money for you, and then the issuer pays out the principal and