Life insurance protects individuals against the risk of premature death; meanwhile, annuities protects against the risk of living too long. 

One of the risks involved with living too long is that an individual might deplete most of their financial resources. Some people think they may have enough in a savings account, such as a retirement fund, but it turns out that they may not have enough to last them throughout their lifetime.

Investing in an annuity can provide a guaranteed income stream for life by systematically liquidating an estate.

Two of the most common uses of annuities are:

  • Providing lifetime income for yourself or a child
  • Accumulating money, such as for a retirement fund

How does an annuity work?

  • A total amount of money is paid out in equal installments over a period of time until the original sum of money is depleted from the account.
  • The money invested with the insuring company will earn interest {CHA-CHING}.
  • The interest that is accumulated from the monies will be paid out of the annuitant.

The amount of each annuity payment is based on three factors:

  • The amount of the original sum of money, which is called ‘the principal’
  • The duration (time) of the payout period, and
  • The assumed interest rate.

Who can provide an annuity Account for me?

Only Insurance companies can provide this guaranteed income for life. We work with over 100 A+ rated carriers that can take care of starting up your annuity today.

How Often will I receive payments once set up?

Annuities are either paid in one single payment, or through multiple payments.  Annuity funds earn a rate of interest that is tax-deferred, allowing the annuity to grow in value. Payments can be set up monthly, quarterly, semiannually, or annually.

What if I die before the annuity is paid out?

Easy, when you set up the annuity, you will designate your chosen beneficiary, who will inherit the annuity upon your death. The amount of the inheritance is the amount equal to the funds plus interest in the annuity

Will Taxes need to be paid on the Annuity?

  • Principal – not taxable, because it is funded with after-tax dollars
  • Interest – taxable income

In conclusion, Annuities can protect consumers against outliving their money. Annuities can protect consumers from the volatile nature of the stock market, unlike stocks or mutual fund accounts.

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