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Are There Different Types of Annuities? Yes
There are fixed annuities, fixed indexed annuities and Immediate
Annuities also known as Single Premium Immediate Annuities.
Fixed Annuities
A traditional fixed annuity
is like a Certificate of Deposit (CD) paying A specific interest rate
declared by the insurance company for a Specific period say 5 years.
Interest earned can either be deferred or if elected interest can be
paid monthly usually beginning after 30 days. If the owner dies the
annuity is paid to a designated beneficiary.
Fixed Indexed Annuities
A
fixed indexed annuity is linked to a specific index and if the index
goes up your account value goes up, not participating in the market
directly but tracking the market. If the index goes down following The
market your account value stays the same.
YOU NEVER LOSE YOUR PRINCIPAL. If the index goes up your account value goes up.
Immediate Annuities/ Single Premium Immediate Annuity
An
immediate annuity is like a pension plan. You give the Insurance Company
a lump sum of money let’s say $100,000 dollars and they then
provide a guaranteed payment to you, usually on a monthly basis for the
rest of your life or on a joint basis, you and your spouse or for some
specific period of time. Optional choices of payout are available based upon your needs and what is best suitable for you.
