Annuities
What is an annuity?
An annuity, in its simplest form, is a stream of payments. It may last your lifetime, like a pension, or some other specified period. Payments may start now (an immediate annuity), or at some time in the future (a deferred annuity).
What is an immediate annuity?
With an immediate annuity (or income annuity), you generally pay the insurer a single amount in exchange for payments that begin immediately (within 12 months). Payments must be no less frequent than annually. Payments continue for your entire lifetime, or for some other duration offered by the insurer, such as the joint lifetimes of you and another person, or a specified number of years. Depending on the option you choose, there may also be a death benefit, where payments may continue to your beneficiary for some time after you die. Immediate annuities can be either fixed, with generally unchanging payments, or variable, where payment amounts will vary based on the performance of underlying investments.
What is a tax-deferred annuity?
A deferred annuity is a type of personal account intended for long-term savings goals, like retirement. Unlike an immediate annuity, income payments are optional and are deferred until a future time. Deferred annuities have two phases: the savings and investment phase, where your earnings accumulate tax-deferred, and the income phase, where you can receive regular payments for your lifetime or another period. Deferred annuities typically allow withdrawals during the savings and investment (or accumulation) phase, and entering into the income phase is typically optional. Early withdrawal charges and ordinary income taxes apply at withdrawal, and tax penalties for withdrawals before age 59 1/2 may apply. There are two types of deferred annuity: fixed and variable.
What is a deferred income annuity?
A deferred income annuity is a type of deferred annuity whose features are designed to help maximize your future income. It's sometimes called "longevity insurance." Flexibility during the accumulation phase (such as the availability of withdrawals) may be limited in exchange for guaranteed payments during the income phase.
For more information on annuities please contact one of our representatives.
Before investing, carefully consider the investment objectives, risks, charges and expenses of the variable annuity as well as their investment options. This and other information is contained in the prospectus, which you should read carefully before investing. Prospectuses are available from your registered representative. Variable annuities are subject to market risk. Your principal value may decline.