Guarantees that allow you to sleep better at night
An annuity is a contract sold by insurance companies designed to provide variable payments to the holder at designated time periods usually for retirement. The time period for receiving a payment from an annuity can vary between a few years and a guaranteed income for life. The annuity owner holder is taxed when funds are removed from the guaranteed fixed annuity. This accumulation benefit is also known as a tax-deferred or tax-sheltered.
The attractiveness of a fixed annuity may be the guarantees the contractual benefits it provides. These guarantees are both in minimum guaranteed yield, a guarantee of funds on deposit and guarantees of future fixed income retirement options.
Annuities are guaranteed by the insurance company issuing the annuity and are highly regulated by each State Department of Insurance. In addition to regulating insurance companies, the state of residence of the annuity owner may also provide an overall financial guarantee.
Guaranteed Minimum Yield:
The actual amount of guaranteed yield state to state is variable, but a reasonable interest rate to consider is 3%. Many states allow for lesser and greater rates of returns to be the underlying guarantee. This annuity guarantee provides a fixed guaranteed minimum the annuity owner will always know what the variable earned on the contract.
Guarantee of Income Deposits:
All fixed (or indexed) annuities provide this guarantee, 100% guarantee of no exposure to market risk. Your funds in a guaranteed annuity are fully protected against loss of your original deposit regardless of any outside condition.
Guarantee of Settlement Or Income Options:
Your right to remove your annuity funds in a pre-set formula as income is contractually guaranteed. These settlement options can include you, your spouse and your heirs and can be customized to fit almost any situation with lifetime income options. These options can often also include a guaranteed rate of yield in the calculation of the income benefit. Most contracts have dozens of available options for settlement.
Guaranteed fixed principal, guaranteed fixed interest, guaranteed retirement income.
More information regarding annuity guarantees can be found here: https://www.nolhga.com/policyholderinfo/main.cfm
Disclaimer: Annuities are not for everyone. Please seek professional advice regarding tax liability and investing options based on your situation.