Annuities Common Questions
What is an annuity?
An annuity is a long-term financial contract in which an insurance company promises to make a series of payments to a named individual in exchange for a premium or a series of premiums. Annuities allow earnings to grow tax-deferred and, therefore, are often used to help provide retirement income. It is the only financial product that offers the opportunity to receive income that cannot be outlived.
What is a fixed annuity?
A fixed annuity is a long-term accumulation vehicle that guarantees you will receive no less than a minimum rate of interest for a specified period of time. Future income payments are also based on a fixed rate of return.
What is an immediate annuity?
An immediate annuity is an income vehicle designed to provide payments within a year of paying premiums.
What is a deferred annuity?
A deferred annuity has two phases. During the accumulation phase, the money you put into the annuity, less applicable charges, earns interest. Any earnings grow tax-deferred as long as you leave them in the annuity. During the second phase, called the payout period, the company pays income to you or to someone you choose.
What is annuitization?
A unique feature of the annuity is its payout period, which includes the opportunity to receive guaranteed annuity payments for the rest of your life and even the life of your spouse. All payment guarantees are based on the claims-paying ability of the issuing insurance company.
What does “tax deferral” mean?
Income taxes are deferred on earnings until you receive them, so your money may grow faster than a taxable investment. Taxable investments may offer other benefits. If you purchase an annuity within an IRA or qualified plan that features tax deferral, there’s no additional tax benefit. You should carefully consider other benefits and costs before purchasing an annuity in a tax-qualified plan.
Fuel price protests hit India, Malaysia (AP)
Angry consumers blocked rail tracks and roads and shut down businesses in parts of India for a second day Friday to protest a hike in fuel prices by the government, while Malaysia defended its decision to end fuel subsidies.
Fuel price hike protests hit India (AP)
Angry consumers blocked rail tracks and roads and shut down businesses in several parts of India for a second day Friday, protesting a hike in fuel prices by the government.
Peer-to-peer lending grows in bad economy (Bankrate.com)
P2P lending has been around since 2005, but it’s getting a boost from the current economic environment and credit crunch.