Types of Annuities

We provides the following types of annuities
  • Fixed Annuities
  • Equity Indexed Annuities
  • Deferred Fixed Annuities
  • Deferred Equity Indexed Annuities
  • SPIA (Single Premium Immediate Annuity) Immediate Income (with-in 12 months)
  • Period certain (5 YR's up to 15 YR's certain period)

There are two general types of annuities:  1) Immediate Annuities and 2) Deferred Annuities (in when they start paying out).

The difference between deferred and immediate annuities is just about what you'd think.

Immediate Annuity

With an immediate annuity, your income payments start right away (technically, anytime within 12 months of purchase). You choose whether you want income guaranteed for a specific number of years or for your lifetime. The insurance company calculates the amount of each income payment based on your purchase amount and your life expectancy.

The payout phase begins when you decide to take income from your annuity. For most people, this is during retirement. As your needs dictate, you can take partial withdrawals, completely cash-out (surrender) your annuity, or convert your deferred annuity into a stream of income payments (annuitization). This last option is essentially the same as buying an immediate annuity.A deferred annuity has two phases: the accumulation phase, where you let your money grow for a while, and the payout phase. During accumulation, your money grows tax-deferred until you take it out, either as a lump sum or as a series of payments. You decide when to take income from your annuity and therefore, when to pay the taxes. Gaining increased control over your taxes is one of the key benefits of annuities.

Immediate annuity is a type of annuity in which the contract owner starts getting payments after a single premium is paid. Payments can be made on a monthly, quarterly, annual or semi-annual basis. The rate of payment in immediate annuity is of two types - fixed rate and variable rate. The fixed rate guarantees a set income that will not fluctuate, whereas in variable rate payments will fluctuate according to the performance of selected investment the annuity is based on.

Deferred Annuity

Deferred annuity refers to a type of annuity in which the payment of income, installments or a lump sum is delayed until the investor decides to receive them. Earnings on a deferred annuity account are taxed only upon withdrawal, providing the annuity with a tax benefit. This facility makes deferred annuity a great way to accumulate money for retirement. Deferred annuity has two main phases, savings phase in which money investment is made into the account and income phase in which payments are received.

Tax Sheltered Annuity

Tax-Sheltered Annuity is a type of annuity that allows an employee to make contributions from his or her income into a retirement plan. The contributions are deducted from the employee's income and as a result, the contributions and related benefits are not taxed until the employee withdraws them from the plan. Because the employer can also make direct contributions to the plan, the employee gains the benefit of having additional tax-free funds accruing.

CD-Type Annuity

CD-type annuities refer to interest rate investment that is issued by insurance companies. Since they pay a pre-specified interest rate for a specific term, they are often compared to CDs and termed as "CD-Type annuity." They're different from most fixed annuities in a way that if you buy a five-year CD-type annuity at 4 percent, you're guaranteed to get 4 percent annually if you hold the CD for five years while other fixed rate annuities often guarantee a rate only for the first year.