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Annuity Basics

Annuity Basics Overview

Want to learn more about the different types of annuity products and how you can use them to better secure your retirement with guarantees? You’ve come to the right place. Whether your goal is to Grow Your Money, Get Income Now or Guarantee Future Income, there are annuities available that can help you get there.

Explore our Glossary of Terms, FAQs and Annuity Basics Posts. Also, learn more about the various annuity types and match your financial objectives with the best solution.

Grow Your Money

Focus on this category of annuities if you are looking for ways to grow your money via fixed or indexed linked interest compounding, while maintaining complete protection of your principal.

Get Income Now

Do you need to create a guaranteed income stream now, or within the next year? If so, this category of annuities is designed to help you accomplish that goal in the most efficient manner possible.

Guarantee Future Income

If you want to generate the maximum amount of guaranteed income, with payments beginning in more than one year, then these are the annuities you should explore.

  • Deferred Annuities
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    A deferred annuity would better be defined as a category of annuities rather than a type of annuity. All annuities can be categorized as either deferred or immediate. When income payments are scheduled to begin is the determining factor as to which category an annuity belongs. There are many different types of annuities that fall… Read more

  • Immediate Annuities
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    An immediate annuity, also called an income annuity or single premium immediate annuity (SPIA), is a type of annuity designed to provide guaranteed income payments that must begin between one month and one year after purchase. The purchase of an immediate annuity is usually an irrevocable decision that cannot be undone once the free-look period… Read more

  • Multi-Year Guarantee Annuities
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    Multi-Year Guarantee Annuities (MYGAs), also known as Fixed Rate or CD-type Annuities, are a type of fixed annuity that provide a pre-determined and contractually guaranteed interest rate for a specified period of time, most commonly 3-10 years. For this reason, they are often compared to Bank CD’s. To learn more about MYGA and Bank CD… Read more

  • Fixed Indexed Annuities
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    Fixed indexed annuities, formerly called equity indexed annuities, are a type of deferred annuity that credits interest based on the changes to a market index, such as the S&P 500 or Dow Jones Industrial Average. Interest is credited when the index value increases, but the interest rate is guaranteed never to be less than zero,… Read more

  • Hybrid Annuities
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    The term hybrid annuity is used by some annuity marketers to describe a fixed indexed annuity with an attached optional guaranteed lifetime income rider. Technically, there is no such thing as a Hybrid Annuity. It is not a category of products, or standardly defined by any insurance company, but rather, a marketing term used to… Read more

  • Traditional Fixed Annuities
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    A Traditional Fixed Annuity is a type of annuity contract that credits an interest rate that is declared one year at a time. Sometimes, during the first year, they will offer an upfront premium bonus or interest rate enhancement. After the first year, the issuing insurance company will re-set the interest rate on an annual… Read more

  • Deferred Income / Longevity Annuities
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    A deferred income annuity (DIA), also called a longevity annuity, is a type of annuity contract that is designed to provide lifetime guaranteed monthly income at a predetermined future target date. Its primary purpose is to protect against outliving one’s assets at advanced ages, in the most efficient manner possible. With a deferred income /… Read more

  • Qualified Longevity Annuity – QLAC
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    A Qualified Longevity Annuity Contract (QLAC) is a relatively new type of deferred income annuity that was created as a result of a July 1, 2014, U.S. Treasury Department ruling. Please visit our Deferred Income / Longevity Annuities page for a complete description of this type of annuity. The 2014 ruling addressed and solved a… Read more

  • Bonus Annuities
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    A Bonus Annuity is a type of annuity product that offers either an upfront premium bonus or a first year interest rate bonus. When available, upfront premium bonuses are typically found with fixed indexed annuity products, while first year interest rate bonuses are usually attached to traditional fixed annuities. Upfront Premium Bonus – A lump… Read more

  • Split Funded Annuities
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    A split funded annuity is better defined as an annuity strategy, rather than a separate type of annuity. This strategy aims to provide immediate tax advantaged income by combining two annuities to achieve a specific goal. The goal in this case, is to increase after tax income when compared to taking systematic interest withdrawals from… Read more

  • Secondary Market Annuities
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    Secondary Market Annuities (SMAs) are created when the current owner of a structured settlement, period certain immediate annuity or lottery winnings sells their future stream of payments for a lump sum, at a discounted price. The majority of secondary market annuity transactions involve structured settlement payments that were awarded for damages or as a result… Read more

  • Variable Annuities
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    A variable annuity is a contract where all of the premium deposits are invested in variable subaccounts subject to market fluctuations, as opposed to a principal protected fixed interest annuity. The available subaccount options function very similar to an assortment of mutual funds that the investor can choose from, but they also have an insurance… Read more

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