How many types:
Fixed Rate Annuity
Fixed Indexed Annuity
Charitable Gift Annuity
Types of Annuities
INCOME ANNUITY (SPIA or DIA)
This is the original annuity design. We shop among all the top carriers and provide competitive spreadsheets to show you've done your homework to secure the best payouts. These are the basics, and please visit our SPIA page for details & quotes.
- Guaranteed lifetime income starts 30 days or later from the contract issue date.
- There is full transfer of risk to an insurance company to pay a guaranteed income stream for your full life or for your and your spouse’s lives, or for a specific period of time.
- It is very customizable – many payout ooptions available (life, life with period certain, life with cash refund, etc.).
- You can add an annual Cost of Living/Inflation (COLA) percentage increase to the policy.
Terminology and features:
- “Annuitization” describes the payout of an Income Annuity;
- Annuitization (or purchasing a SPIA) is when you provide an insurance company with a single payment, and in exchange the insurance company guarantees you regular income payments as determined by you – generally the rest of your life;
- There are no fees or costs;
- Payments can be deposited directly into bank accounts, or can be send to other payees to fund various obligations.
FIXED RATE ANNUITY (CD TYPE - Also known as "MYG" or "MYGA")
This deferred annuity type pays a fixed contractual interest rate for a specific period of time, just like a CD pays a fixed interest rate for a set period of time. Facts and features: It can be purchased for guaranteed terms as short as two years and up to 10 years or more to receive the contractually guaranteed rate;
- Unlike a CD, the taxes on the interest earned are deferred until the money is withdrawn;
- Also unlike a CD, annuities are free from probate, allowing quick & direct transfer to your hiers.
- You retain full control of your money;
- Principal is guaranteed against loss;
- There are no fees or costs;
- Liquidity ranges from current year's interest only to a full 10% of the annuity's value.
FIXED INDEXED ANNUITY
The Fixed Indexed Annuity is a deferred annuity that protects your principal and allows for interest crediting tied to an index like the S&P500, DJIA, etc. People use them to outpace fixed rates and still stay protected.
- This type of annuity is protected from any market loss. If the index goes down, no interest is credited and the previously locked in account value stands.
- Any interest credited is locked in and cannot be lost.
- Other benefits are usually added as “riders” such as guaranteed lifetime income stream options;
- Taxes on gains are deferred until money is taken out;
- Costs are none to very low as compared to Variable Annuities.
VARIABLE ANNUITY (We do not offer VAs)
The Variable Annuity structure offers mutual fund-type choices as investment options. Variable Annuities need to be constantly monitored and fees do apply. Here are facts and features to be aware of:
- Fees typically range from 1.5% up to 5% per year;
- investments are subject to losses;
- In many cases Variable Annuities are not suitable or appropriate for seniors due to high fees and potential market loss;
- Taxes on gains are deferred until the money is taken out.
We believe that generally you can achieve the same goals with less cost and no risk by utilizing one of the fixed annuity structures rather than choosing a variable annuity.
CHARITABLE GIFT ANNUITY
The Charitable Gift Annuity can be described as a transaction in which an individual transfers cash or property to a charitable organization in exchange for the charity’s promise to make fixed annuity payments to one or two people. Charitable Gift Annuities are not commercial products, but we can offer a very attractive alternative.