A RETIREMENT PLANNING SOLUTION WORTH CONSIDERING
Is an Annuity
Right For You?
Secure Your Long-Term Future
Key Benefits of An Annuity
Free-Look Period
Most states require insurance companies to include a free-look period that allows a buyer to cancel the contract without incurring a surrender charge.
Riders
Riders are addendums that allow the customization of basic annuity contracts. It’s important that you understand the riders you select and are aware of their additional costs.
Beneficiaries
You can add a death benefit rider to your contract to ensure that your beneficiary receives a portion of the contract value.
Fees and Commissions
The fees and commissions for annuities vary by the type of annuity. Fixed annuities generally have the lowest fees.
Taxation
One of the most attractive features of annuities is their favorable tax treatment from the IRS. If your annuity was purchased with money that you've already paid taxes on, then only your earnings will be taxed when the money is withdrawn.
Why Choose an Annuity?
Principal is safe backed by reserves at insurance companies mandated by government
Can earn stock market returns without downside risk
Many annuities offer withdrawal features to avoid penalties associated with premature withdrawals
Tax deferral-annuities allow your savings to grow without being taxed each year boosting returns
Annuities can avoid probate
Annuities are usually protected from creditors
Annuities are designed to supply income through a process of accumulation and annuitization or, in the case of immediate annuities, lifetime payments guaranteed by the insurance company that begin within a month of purchase — no accumulation phase necessary.
In essence, when you buy a deferred annuity, you pay a premium to the insurance company. That initial investment will grow tax-deferred throughout the accumulation phase, typically anywhere from 2-10 years, based on the terms of your contract. Once the annuitization, or distribution, phase begins — again, based on the terms of your contract — you will start receiving regular payments.
Annuity contracts transfer all the risk of a down market to the insurance company. This means you, the annuity owner, are protected from market risk and longevity risk, that is, the risk of outliving your money.
To offset this risk, insurance companies charge fees for investment management, contract riders, and other administrative services. In addition, most annuity contracts include surrender periods during which the contract holder cannot withdraw money from the annuity without incurring a surrender charge.
Furthermore, insurance companies generally impose caps, spreads and participation rates on indexed annuities, each of which can reduce your return.
Complete Protection
For Your Loved Ones
Secure your family's financial future with an Annuity Today!
ANNUITY TERMS
Thank you for your interest in annuities. The information below may help you understand some of the more commonly used terms for annuities.
ACCOUNT VALUE
The amount of money in the annuity.
ANNUITANT
A person who will receive the income payments from an annuity. (They could be the direct owner of the annuity, or another person chosen by the direct owner, and they are the person whose lifetime income the payments are based on.)
ANNUITIZE
When you turn your current account balance into a series of periodic income payments, either for a specific period of time or for your whole life.
BENEFICIARY
The person you designate to receive any remaining account balance or income payments should you pass away.
BONUS
The ability to permanently adjust your income based on a pre-set guaranteed growth rate. This guaranteed growth rate is periodically applied to your benefit base (which is your income base plus any additional guaranteed growth increases), which permanently increases the benefit amount you receive.
CAP
The maximum amount your annuity may be able to earn at the end of a selected time period. You choose the time period that’s best for you from a set of available options.
CHARGE
The amounts associated with owning an annuity, which may include setting up the annuity, adding optional benefits, etc.
CONTRACT VALUE
The amount of money in the annuity.
DEATH BENEFIT
A benefit that pays your beneficiary the remaining account balance or income should you pass away.
FIXED ACCOUNT
An account that earns a guaranteed interest rate and is not invested in or tied to the market.
FIXED ANNUITIES
An annuity that delivers 100% protection from market downturns with the potential for earned interest. Note that for a deferred fixed annuity, there is the benefit of a guaranteed interest rate, in addition to downside protection and the potential for earned interest.
FIXED INDEX ANNUITIES
An annuity that guarantees principal protection from market downturns with the potential for growth tied to a market index.
FLOOR
The minimum interest rate that is credited to an annuity's underlying investment portfolio.
IMMEDIATE ANNUITY
An annuity that begins paying out guaranteed income within one year after the date of purchase, either for life or for a selected time period.
INDEX
An index is a statistical market indicator. It tracks the performance of a group of assets or basket of securities.
INDEX PARTICIPATION RATE
For some indexed annuities, if the underlying index value increases, you receive a portion of that increase. This is called the participation rate. For example, if the market went up 10% and the annuity’s participation rate was 80%, the annuity would be credited with an 8% return (80% of the gain).
JOINT AND SURVIVOR ANNUITY
An annuity contract that guarantees payments for the remainder of two people’s lives. A joint and survivor annuity ensures that the secondary annuitant, often the spouse, will continue to receive payments after the contract holder’s death.
LONG TERM CARE ANNUITY-VARIABLE ANNUITIES
A financial product that offers the potential to grow your money through various market investment options and that can provide income during retirement. These annuities may offer optional benefits, available at an additional cost, that can protect your lifetime income from market downturns, combined with potential growth.
MARKET VALUE ADJUSTMENT
You can permanently increase the amount in the annuity you can withdraw money from (your income base) when the account balance, or the total amount of money in the annuity, exceeds a certain level. This may occur on an annual or daily basis, depending on the annuity.
NON-QUALIFIED ANNUITY
An annuity contract purchased with pre-tax dollars, such as funds from an IRA or a 401(k) plan. The money you use to purchase a qualified annuity is subtracted from your annual income in the year you make the purchase. It is taxed only when you begin to receive the funds from the annuity, usually in retirement.
PARTICIPATION RATE
A percentage by which the insurer multiplies the change in an index during the contract term to arrive at the amount of interest they will credit to an indexed annuity contract.
POINT TO POINT
An interest crediting method used in index annuities that credits interest based on a first and last day in a given time period.
PREMIUM
For most annuity types, this is the money you put into the annuity.
PREMIUM BONUS
The ability to permanently adjust your income based on a pre-set guaranteed growth rate. This guaranteed growth rate is periodically applied to your benefit base (which is your income base plus any additional guaranteed growth increases), which permanently increases the benefit amount you receive. Some companies have an upfront bonus added to the initial premium to boost return.
RIDER
A feature that can provide benefits or protection to you or your beneficiaries at an additional cost.
ROLL UP
The ability to permanently adjust your income based on a pre-set guaranteed growth rate. This guaranteed growth rate is periodically applied to your benefit base (which is your income base plus any additional guaranteed growth increases), which permanently increases the benefit amount you receive.
SUB ACCOUNTS
The underlying investment choices are available in a variable annuity. These typically include stock, bond, and money market funds.
SURRENDER
An amount you pay if you withdraw a certain amount of money from your annuity before the end of a set time period. For example, your annuity may allow you to withdraw up to 10% of your income base within a period of time. If you withdraw more than 10% during this time, you would be charged a fee.
SURRENDER CHARGES
An amount you pay if you withdraw a certain amount of money from your annuity before the end of a set time period. For example, your annuity may allow you to withdraw up to 10% of your income base within a period of time. If you withdraw more than 10% during this time, you would be charged a fee.
QUALIFIED ANNUITY
An annuity contract purchased with pre-tax dollars, such as funds from an IRA or a 401(k) plan. The money you use to purchase a qualified annuity is subtracted from your annual income in the year you make the purchase. It is taxed only when you begin to receive the funds from the annuity, usually in retirement.
TAX DEFERRED
Tax status that allows income to accumulate free of taxes. WAIVER- Your annuity might contain a provision that waives surrender charges if you become terminally ill, thus allowing you access to your money when you may need it most. While the definition of terminally ill may vary slightly from company to company, it's generally a condition that will result in your death within six months to a year.
WITHDRAWAL
The act of taking money out of an account; distributions.
WITHDRAWAL BASE
The amount that the annuity owner can withdraw.
Ready To Explore Your Options?
Address : 411 Buchloe Drive Marysville, OH 43040
Address : 411 Buchloe Drive Marysville, OH 43040
Call : (614) 796-4030
Call : (614) 796-4030
Copyright 2023 Donald Brown Insurance Agency | All Rights Reserved
Privacy Policy | Powered by Bizapp247
Disclaimer: By submitting your information on this website you agree to receive email and text messages from Donald Brown Insurance Agency. You may opt-out at any time by replying STOP or clicking the unsubscribe link in the email. Your information is 100% confidential and never sold.