Deferred Annuity: Fixed

顯示具有 Fixed 標籤的文章。顯示所有文章

2012年9月26日星期三

Comparing Fixed Annuities Versus Bank CD's

For people that are ultra conservative and only want their funds in a bank CD, reconsider that situation and look into fixed annuities. Fixed annuity rates increase and decrease with market conditions, just like CD rates. However, there are differences between fixed annuities and CDs that may make the annuity a more valuable asset in specific situation.

Before delving into those differences, you should be aware that fixed annuities aren't for everyone. The person that has several years before reaching the age of 59 ½ should not consider putting all assets in a fixed annuity. If you remove the funds before the age of 59 ½, there's a 10 percent penalty on the growth. However, if they want tax-deferred growth or a higher rate of return on their IRA funds, a fixed annuity may be a very appropriate investment vehicle also.

How is a fixed annuity better than a CD? First, both fixed annuities and CDs have a penalty period. In annuities, the period is a surrender period and you receive a surrender charge. In bank CDs, the time charge is a penalty for early withdrawal. While the two are similar, there's a huge difference. When the term on a CD ends, the bank sends you a statement letting you know. Some people don't respond, either because they're busy, they forget, they're ill or simply out of the area. The CD then rolls over to another CD of the same term. Many CD shoppers notice that the specials are odd numbers of months, such as 56 months instead of 60 months. That's because if the CD rolls over automatically to another 56 months, the rate isn't as high as a standard number of months, such as 60 months, 5 years.

If you find that your CD rolled to a much lower non-standard term, you'll also notice that the interest is well below what the market conditions suggest. In order to remove it, and invest it at a higher rate, you have to face a new early withdrawal penalty.

There is no rollover for fixed annuities. While the interest rate changes according to market conditions, once the policy ends the surrender period, the company doesn't set a new surrender period. This means it's free from the worry of having your money stuck in a low interest bearing account. Any time you want, after the surrender period ends, the company allows you to withdraw funds.

Another important feature of a fixed annuity that makes it a superior investment over bank CDs is the tax-deferred interest. If you simply want to allow the funds to grow and pass to heirs, with the option of invading them if you need to do that, fixed annuities allow the money to build faster and grow tax-deferred.

Tax-deferral is important if you're a senior. You don't have to be in the 33 percent bracket to reap rewards. If your income borders on the limit where you might have to begin to pay taxes on the second half of your social security, tax-deferred growth saves thousands of dollars each year.

No matter what your situation, it pays to diversify your investments. If you simply cant' tolerate the fluctuations of the stock market and find that type of diversification unsuitable for you, consider at least, diversifying within fixed products. A fixed annuity is one way to do that.

Jonathant Tyler provides information and strategies for retirement. If you're interested to learn more about annuities or to get a fixed annuities quote without obligation, come see us. We provide up to date information on the retirement investment market, and the options available.

This post was made using the Auto Blogging Software from WebMagnates.org This line will not appear when posts are made after activating the software to full version.

Fixed Annuities Offer Numerous Options

An annuity may be either immediate or deferred. If income is important now consider an immediate annuity. Immediate annuities are usually purchased with a single premium and they provide income payments that begin immediately. The reason for buying an immediate annuity is to obtain immediate income and to make the insurance company the responsible money manager. The insurance company will assumed fiduciary responsibility for the income and will pay you on your selected time period.

If you are not yet ready for retirement, consider a deferred annuity. Deferred annuities provide income payments that can start many years later. Deferred annuities have an accumulation period, which is the time between when you pay premiums and when income payments start. The main advantage of a deferred annuity is to accumulate money on a tax-deferred basis, which can then provide an income at a later date.

A fixed annuity provides fixed dollar income payments backed by the guarantees in the contract. During the accumulation period of a fixed deferred annuity, your money earns interest rates set by the insurance company spelled out in the annuity contract. Most fixed annuities have a current interest rate and a minimum guaranteed interest rate. The company guarantees that it will pay no less than a minimum rate of interest. Many other contracts will offer a higher fully guaranteed interest rate for the entire length of the contract. You have numerous options in selecting the best annuity for you.

During the payout period, the amount of each income payment to you is generally set when the payments start and will not change. There are options available to the annuitant which can allow for changes based on outside circumstances. See your annuity contract for details of these options.

An equity linked indexed annuity is a type of fixed annuity, but its returns are based upon the performance of an equity market index, such as the Standard & Poor's 500 and the Dow Jones Industrial Average. New products are being released constantly with newer crediting choices and options. Equity linked indexed annuities offer safety and security while not tying your returns to the insurance company. The actual credited interest is set by the outside source.

Regardless of what the annuity offers it is important that the benefits match up to your needs and goals. Make certain you ask questions and it is always a good idea to obtain a second opinion.

Bill Broich helps seniors manage their retirement savings. Visit his website for more information: Free Annuity Booklet.

This post was made using the Auto Blogging Software from WebMagnates.org This line will not appear when posts are made after activating the software to full version.

2012年9月22日星期六

Different Types of Fixed Annuity and Its Benefits

Spiritual gurus may prophesy to live life in the moment but at times, it is very important to think about the future as well. And one of the most important aspects of future planning is financial planning. In the increasingly volatile world of today it is imperative that we have an assured source of income at retirement or when an economic calamity hits us.

For the daring investors, there is the stock market which can help you make quick money. But for the not-so-daring who are looking for a secure investment is a fixed annuity. This investment option basically gives you interest which is guaranteed by the insurance agency.

Fixed annuity is also at times referred to as tax deferred annuity. Reason being that it delays tax payments on your earnings until you withdraw money from it or start earning an income. This investment option is a great way to secure your retirement plans and gives you a steady flow of money.

A fixed annuity is of different types. They are:

· CD annuity - The certificate of deposit or CD annuity gives you a fixed rate of interest for a specified period of time. The interest rate does not change for the decided time period which is chosen by you at the time of setting up the annuity.

· Traditional Fixed Annuity - As the name suggests, this is the oldest and most popular kind of annuity. In this kind of annuity, the insurance company revises the rate of interest each year at the starting date of your annuity. But you can be rest assured that the revised interest rate would not be less than the minimum rate of interest guaranteed by the insurance company. The minimum rate of interest is clearly mentioned by the company at the time of fixing up your annuity. This kind of annuity is market linked and does have its pros and cons because at times of adverse economic conditions, the interest rate can be significantly lower than that in a CD annuity.

· Immediate Annuity - The name says it all. This kind of fixed annuity does not give you the benefit of tax deferral. Instead, it immediately starts giving you a steady flow of guaranteed income at the outset. This type of annuity is best suited for people who are nearing their retirement and do not sufficient time to build upon their resources with the help of tax deferral. Tax deferral annuities are meant for people who have a long way to go for retirement and can build a substantial reservoir of finances for their old age.

These are the different kinds of fixed annuities. But before you take a pick from the above, make sure that you consult some top notch financial planners to make an informed decision. Most of the times, insurance companies or banks would not tell you what is best for you. Hence, it is always wise to consult an expert before you decide to invest your hard earned money.

Click on the link below to learn more about a Fixed Annuity.

Visit http://www.annuitycampus.com for more Annuity and Life Insurance Tips and Tricks. Call Robert Eldridge directly at 800-643-7544. Robert Eldridge holds over a decade of experience as a multiline agent in multiple states and currently serves on the membership council of the National Association of Insurance and Financial Advisors.

This post was made using the Auto Blogging Software from WebMagnates.org This line will not appear when posts are made after activating the software to full version.

2012年9月3日星期一

Fixed Deferred Annuity Tax Treatment

With tax reform continuously in the picture, the insurance industry's deferred annuities are quickly becoming a more attractive investment alternative for certain circumstances.

Deferred annuities to serve as an investment alternative

They are especially helpful for those individuals whose incentive to continue to make IRA contributions is greatly weakened by tax rules. Although contributions to a deferred annuity are not tax deductible, earnings do accumulate tax deferred. Advantage over an IRA: There is no limit to the amount of money you can invest in an annuity.

Replacement for investments that received tax benefits

A variable annuity could serve as the ideal replacement for investments that used to receive the benefit of favorable investment tax credits and accelerated write-offs. The reason is that long term gains from investments in stocks, which are currently taxed, can grow tax-deferred in a variable annuity. That income, from gains and dividends, is not taxed until you withdraw your money from the annuity. There are tax implications associated with early withdrawals and surrenders. Withdrawals may be subject to income taxes and, prior to age 59 ½, a 10% federal penalty may apply. Also, a deferred sales charge may be assessed if surrendered during the first years of the contract.

Many variable annuities offer the policy owners a choice of investment accounts with the right to switch funds from one to the other. Thus, funds could be in the growth oriented stock fund during employment years and switch to a more conservative account nearing retirement.

Taxation and Exchange of Older Contracts

If the contract surrendered in the exchange is a pre-TEFRA contract (that is, the contract was issued before August 13, 1982), withdrawals from the contract will be subject to favorable FIFO treatment. The income first rule will not apply. It is not clear, however, how the 10% penalty tax can apply to the contract if withdrawals are not subject to tax. It may be that the penalty will not apply until the investment is withdrawn.

Investors should consider the investment objectives, risks, charges and expenses of variable annuities and their underlying funds carefully before investing. The prospectus contains this and other information and should be read carefully before investing.

Withdrawals or loans will reduce the value of the contract as well as reduce the death benefit. There may be additional costs associated with options or features of a variable annuity that are not typically associated with other investments. Please check the prospectus for details on costs and conditions. The prospectus can be obtained from the financial representative offering the product.

William Bowyer is a self-proclaimed expert in all things financial, and specifically deals with fixed deferred annuity contracts. Visit him online at The Fixed Annuity Guide and learn more about tax treatment of fixed annuities.

This post was made using the Auto Blogging Software from WebMagnates.org This line will not appear when posts are made after activating the software to full version.

2012年9月2日星期日

Is a Fixed Deferred Annuity a Good Investment?

The fixed deferred annuity is a solution of the insurance industry to loss protection needs and long-term savings. Annuity holders receive interest on their deposited funds just like the owners of liquid accounts at financial institutions and banks.

In addition to the benefits of ordinary deposit accounts, life insurance coverage is also offered as an added benefit by annuities. Besides this, the funds invested in deferred annuities are free from immediate tax. However, the absence of temporary taxation has a major drawback of Illiquidity.

Confusion of terminology clarified

Fixed and variable are two basic categories of annuities. Fixed annuities offer a fixed rate of return on investment while rate of return on variable annuities fluctuates greatly.

Fixed annuities ensure guaranteed return for a particular amount of time. In simple words, minimum final investment value is assured to the annuity owner or the policy holder.

Annuities vs. Other Investments

Most of the times, the returns offered by annuities are much better than other investments like money market accounts or certificate of deposits. This is mainly because your money is invested for a longer period of time.

The power of compound interest combined with time makes your ending balance much higher compared to other investment options.

Immediate vs. deferred annuities

It is necessary to understand these two sub categories of fixed annuities in order to make well informed investment decisions.

When you invest in an immediate annuity, you start receiving money shortly after investment. The process of periodic payment continues for a particular amount of time or for your entire life. A continuous cash flow is possible because of the accumulation of interest on the unpaid residual portion of your initial investment.

On the contrary, a deferred annuity rewards the investor after a certain time limit. The investor has to wait for a specified number of years to receive a lump sum or periodic payments after making the initial investment. Due to the accumulated interest over the years, the value of your investment grows substantially to a significant amount.

The common features of immediate and deferred annuities are as follows.

-Guaranteed rate of return and principal preservation

The original value of the investment will never fall except when the insurer becomes insolvent. The investor is assured of minimum return on the investment. Since the investor is assured of receiving a specific amount of money after a specified time, he is in a better position to plan financially for the long term.

-Guaranteed rate of return

Since the minimum rate of return is guaranteed on investment, the investors are able to plan their financial future in a better way.

-Death Benefit

Just like life insurance policies, annuities feature loss protection which enables the beneficiaries to receive a lump sum amount in case you die. On the contrary, if you have invested in conventional deposit accounts or CDs, your beneficiaries will only receive the initial investment and the accumulated interest going forward.

-More flexible withdrawal options

On maturity of annuity, the investor can withdraw the whole amount or opt for periodic receipts. This choice is not offered by any other investment options. The investor can either choose to reinvest the complete amount immediately or accept a lump-sum disbursement to absorb any tax effects.

Advantages of Deferred Annuities

Deferred annuities offer a major benefit in the form of tax deferral. Though you are required to wait for a specified amount of time to receive any funds, you receive the added benefit of tax relief as your investment grows.

Don't underestimate this great benefit with a fixed deferred annuity. Since the rates of taxes are high, it can take a huge part of your savings. For example, if you are eligible for a tax of 35 percent and the return on annuity is 5 percent, you will be able to realize the full 5 percent return due to tax deferrals.

On the other hand, if your returns are taxed immediately, the returns are reduced to 3.25 percent which is just above the yearly US rate of inflation of 3 percent. Thus, when a person whose investments are subjected to immediate tax retires, his or her investments hardly increase in terms of real money.

Jay Grieco is a publisher with an informational website concerning many types of annuities. Use this website as a research tool to find out more about the various kinds of annuities and how they may benefit you. Visit: http://www.annuityexplainedcenter.com

This post was made using the Auto Blogging Software from WebMagnates.org This line will not appear when posts are made after activating the software to full version.

Reviewing the Benefits of the Fixed Annuity

If you're planning for retirement, leaving a position and rolling your pension or 401(k) or simply want to start a safe secure investment, you'll find the fixed annuity is perfect for your situation. There so many different uses for a fixed annuity that it works for almost everyone's financial plan at some point in their lifetime. Fixed annuities are versatile and although the wording might be confusing at first, once you understand a few phrases, you'll easily understand the fixed annuities.

Fixed annuities are qualified or non-qualified, immediate or deferred and come in a variety of different names that describes the company or entices you to purchase the product. The term fixed is an indication of how the principal acts. Unlike a variable product whose principal fluctuates daily. The fixed annuity is like a CD or savings account. The principal only grows as you add interest to it.

A fixed annuity can be an IRA, pension, 403(b), 401(k) or rollover IRA, which makes the product a qualified annuity. Qualified annuities and non-qualified annuities can be the same product. The difference between the two is the paperwork used to identify that the government recognizes its pension money, and therefore gets special tax consideration. If you thought an IRA was a special product, think again. It can be any type of investment with the papers to show the funds for an IRA. If make an annuity an IRA, it becomes a qualified annuity.

Fixed annuities are either immediate or deferred. Immediate annuities are ones you select when you wish to begin an income from a lump sum of money. You purchase the fixed annuity and at the end of one payment period, you receive your first check from the insurance company. Of course today, most people have the income directly deposited into their checking or bank account to avoid the hassle of taking a check to the bank or the worry of someone stealing the check from their mail. A deferred annuity is like the bank CD; you simply use the account to grow your funds. The difference between bank products and a fixed annuity is that you have tax sheltering in fixed annuities.

You can have fixed annuities, which are single payment annuities and others that allow you to make as many payments into the product as you wish. Single payment annuities are ones that don't allow any more payments after the initial deposit. If the annuity doesn't identify itself as a single payment annuity, then it's a multiple payment product.

Products can be single payment, deferred and qualified all at the same time. You can combine the different names for the annuity as long as you don't use two opposing titles, such as immediate and deferred. Immediate or deferred annuities can be either qualified or non qualified. Immediate annuities, however, must be single payment.

Once you understand those few words, you'll understand most of the basics for a fixed annuity. There are differences to all annuities in interest rate, guarantee periods for the initial rate and minimum guarantees. There are also differences in the length of the surrender period. The surrender period is how long you must hold the policy before you can cash it out without a penalty. The final term is the penalty free withdrawal. The penalty free withdrawal is the amount the insurance company allows you to remove before the surrender period ends, without any penalty. Some companies only allow interest while others allow a ten percent per year cumulative withdrawal.

If you understand all the terms mentioned, you have a good grasp on what a fixed annuity is. However, it always pays to compare products before you purchase and one of the easiest ways to compare is to use an online quoting site. These sites show products from many different companies, which allow you to find a fixed annuity perfect for your needs.

Jonathant Tyler provides information and strategies for retirement. He often discusses fixed annuities and other retirement vehicles for investors. Come see us if you would like to learn more about acquiring a fixed annuity or the different types of annuities.

This post was made using the Auto Blogging Software from WebMagnates.org This line will not appear when posts are made after activating the software to full version.

2012年8月25日星期六

Annuity - Fixed, Variable, Equity-Based Annuity - Deferred, Immediate Annuity

Annuities are not a new concept, although they have become more complex over time. The first annuities were documented in America during the mid-eighteenth century by Pennsylvanian ministers, and it was not until the early twentieth century when they became available for purchase by the general public.

WHAT IS AN ANNUITY? HOW CAN YOU BENEFIT FROM AN ANNUITY?

So, what is an annuity, and how can you benefit? A simple answer is that an annuity is an agreement between you and your insurance company. Annuities can only be sold by agents specifically licensed to do so, and each insurance company is regulated by individual state insurance commissions. Your insurance agent must possess a life insurance license as well as a license from the National Association of Securities Dealers (NASD) or the Securities and Exchange Commission (SEC).

If your insurance company goes bankrupt, other licensed companies in the state are required to honor your contract. The terms of an annuity are that you will pay a sum of money to the insurer (either a lump sum or series of payments) and they will make scheduled payments to you immediately or delay payments until after a certain period of time.

Unlike your 401(k), annuities grow tax-deferred and you will not pay any taxes to the Internal Revenue Service (IRS) until you begin withdrawing funds from your annuity. Unlike other savings options through a bank which may calculate and charge yearly taxes on your interest, in a tax-deferred annuity your taxes are based only on the final accumulation of your annuity at the time of withdrawal.

ANNUITY TYPES: FIXED ANNUITY, VARIABLE ANNUITY, EQUITY-BASED ANNUITY

In addition to deciding when you will receive your money from an annuity, you can also choose between a fixed and a variable annuity. A fixed annuity guarantees a minimum interest rate while your annuity accumulates, and guarantees equal check amounts when you withdraw from the annuity.

A variable annuity allows you different investment options for your funds, with a mutual fund as the most common choice. A variable annuity offers no guarantee to payout amounts, and your income from this annuity will fluctuate depending on the investment vehicle you chose. On occasion you may be offered an equity-based annuity which determines your interest rate based on an equity index such as the S&P 500.

CHOOSING BETWEEN A DEFERRED ANNUITY AND IMMEDIATE ANNUITY PLAN

Deciding between a deferred and an immediate annuity is a matter of personal preference. If you prefer to save for a long-term goal such as retirement, and have no immediate need for the money, you should consider a deferred annuity. It is important to remember that if you choose this type of annuity there are penalties for early withdrawal. The IRS imposes a standard ten percent penalty, in addition to income tax on accrued funds, if you withdraw money before the age of 59 ½. Your insurer may also charge you surrender fees for early withdrawal.

3 METHODS FOR REQUESTING PAYMENT FOR DEFERRED ANNUITY

If you wait until retirement to withdraw money, there are three methods for requesting payment from a deferred annuity. You can:

1) Request a lump sum payment or

2) Take out money only when you need it or

3) Annuitize and receive a set dollar amount every month for as long as you live

Most people choose to annuitize because it also spreads out the required income tax payments. If you die before withdrawing from the annuity your beneficiaries are entitled to receive the balance of your annuity by these methods as well, although if they choose a lump sum they will be charged all the tax on your accrued interest at once.

IMMEDIATE ANNUITY IF CLOSE TO RETIREMENT

If you are close to retirement, or already retired, an immediate annuity is a wiser financial choice. Immediate annuities must be purchased with a lump sum since payments will usually begin within one month of purchase. When you purchase an immediate annuity you are guaranteeing a steady income for the rest of your life, or for a predetermined time period. When you receive payments from an immediate annuity you are only taxed on the earnings from your initial investment. The part of your check that is the principal is not taxable.

3 MAIN OPTIONS FOR WHEN YOU RECEIVE AN ANNUITY PAYMENT

There are three main options to choose from when receiving an annuity payment.

1) The first is Income for Life which guarantees you a set income for the duration of your life, but payments will cease upon your death. This option is risky since you don't know exactly when you will die. Should you die before your annuity has been completely paid out, the insurance company, and not your beneficiaries, will receive the remainder of the annuity funds.

2) The second payout option is Income for Life with a Guaranteed Period. This option is more appealing because it provides the same coverage as the first option, but if you die before the predetermined guarantee period expires, your beneficiaries will continue to receive payments until the guarantee period ends.

3) A third option is known as the Joint and Survivor option. This option guarantees payment to you and another person, usually a spouse, until both of you dies. Annuity payout options are flexible and any of these options can be combined to fit your individual needs.

DOWNSIDES TO AN ANNUITY

Annuities may also be used to fund your 401(k), 403(b), and Individual Retirement (IRA), although it is not generally advised to use your annuity for this purpose. The two downsides of greatest concern are a contribution limitation, and the federal government requirement for you to begin receiving minimum payments by age 70 ½. Additionally, once you have used your annuity to finance your 401(k), for example, you will incur a ten percent penalty for early withdrawal if you take money before you reach age 59 ½ and there are few exceptions to paying this penalty. Once you begin receiving annuity payments you cannot change your mind, and you will continue to receive payments for the predetermined time frame established during the accumulation phase.

author bio - Rocco Beatrice, CPA, MST, MBA
award-winning estate planning & trust expert
MS - Taxation, Master of Science Taxation
MBA - Management / Taxation
BSBA - Management / Accounting
CPA - Certified Public Accountant
-----
Asset Protection Irrevocable Trust, Offshore Asset Protection
Will Contest: What is it? How can you Protect a Will?
71 Commercial Street #150, Boston, MA 02109
tel: +1.508.429.0011 fax: +1.508.429.3034

This post was made using the Auto Blogging Software from WebMagnates.org This line will not appear when posts are made after activating the software to full version.

2012年8月22日星期三

The Compelling Payout and Performance Benefits of Fixed Annuities

Though there are almost countless types and variations of fixed annuity products, the benefits of such products are undeniable. Each variation is designed to provide a slightly different performance or safety benefit to the investor. The different aspects of these contracts are worth further exploration.

Annuity Payout Benefits

The complexities and several shortcomings dissipate when the Single Premium Deferred Annuity is "annuitized" - i.e. the accumulated funds are used to commence monthly payments to the annuitant guaranteed for life. Payments are usually monthly, but can be quarterly or even annual.

There are varieties of ways the annuitization process may be arranged, based on guaranteed cash payments for life, and/or with guaranteed payments (period certain) made even after death to named surviving beneficiaries.

The annuitized payments provide for return of principal in addition to interest, enabling the annuitized payment to be larger than a standard interest withdrawal, as well as partially tax-free through the return of principal. Selecting the manner of the payment stream is relatively complex and professional advice is recommended.

Performance Comparison

Single Premium Deferred Fixed Annuities, as evidenced by performance history, are an above average investment alternative and may consistently outperform other alternatives. Remember, however, that past performance may not be indicative of future results.

The performance of annuities may be even more compelling when their ability to defer income taxation is also considered. While U.S. government issues avoid state taxation and municipal bonds can avoid both state and federal taxation, they are also prone to price fluctuation - especially with longer term maturities.

Deferred Annuities purchased on the fixed yield basis do not fluctuate, and are guaranteed not to lose value. Deferred annuities only increase in value - through the process of interest crediting. Like all insurance products, they have the additional benefit of not being subject to probate.

Fixed Immediate Annuity

The fixed immediate annuity is one where the insurance company agrees to pay an income (generally monthly) to the annuitant. If the amount of the payment is guaranteed at the outset, this is called a "fixed" benefit. Other contracts, with payments that fluctuate based on a portfolio of securities, are referred to as "variable" annuities.

The insurance company has the assurance of the funds for a longer period with an immediate annuity since it cannot be surrendered by the policy owner. Therefore, it will base its payout on the highest current long term investments available. This is usually a higher rate than that which is credited to the current fixed accounts of deferred annuities, which can be surrendered.

Ryan Whittaker is an experienced investor and has studied extensively the pros and cons of fixed annuity contracts. For more information on the fixed annuity, visit him online at The Fixed Annuity Guide.

This post was made using the Auto Blogging Software from WebMagnates.org This line will not appear when posts are made after activating the software to full version.

2012年8月20日星期一

What Charges Or Fees May Be Subtracted From My Fixed Deferred Annuity?

Most annuities have charges related to the cost of selling or servicing it. These charges may be subtracted directly from the contract value. Ask your agent or the company to describe the charges that apply to your annuity, if any.

Surrender of withdrawal charges

If you need access to your money, you may be able to take all or part of the value out of your annuity at any time during the accumulation period. If you take out part of the value, you may pay a withdrawal charge. If you take out all of the value and surrender, or terminate, the annuity, you may pay a surrender charge. In either case, the company will figure the charge as a set percentage of the value of the contract, of the premiums you have paid or of the amount you are withdrawing. The company may reduce or even eliminate the surrender charge after you've had the contract for a stated number of years (term). A company may also waive the surrender charge when it pays a death benefit.

Some annuities have stated terms. When the term is up, the contract may automatically expire or renew. You are usually given a short period of time, called a window, to decide if you want to renew or surrender the annuity. If you surrender during the window, you won't have to pay surrender charges, but if you renew, the surrender or withdrawal charges may start over.

For some annuities, there is no charge if you surrender your contract when the company's current interest rate falls below a certain level. This is sometimes called a bail out option.

In a flexible premium annuity, the surrender charge may apply to each premium paid for a certain period of time. This may be called a rolling surrender or withdrawal charge. Some annuity contracts have a market value adjustment feature. If interest rates are different when you surrender your annuity than when you bought it, a market value adjustment (MVA) may make the cash surrender value higher or lower. Since you and the insurance company share this risk, an annuity with an MVA feature may credit a higher rate than an annuity without that feature.

Free withdrawal

Your annuity may have a limited free withdrawal feature. That lets you make one or more withdrawals without a charge. The size of the free withdrawal is often limited to a set percentage of your annuity contract value. If you make a larger withdrawal, you may pay withdrawal charges. You may lose any interest above the minimum guaranteed rate on the amount withdrawn.

Some annuities waive withdrawal charges in certain situations, such as death, confinement in a nursing home or terminal illness.

Contract fee

A contract fee is a flat dollar amount charged either once or annually.

Transaction fee

A transaction fee is a charge per premium payment or other transaction.

Percentage of premium charge

A percentage of premium charge is a charge determined from each premium paid. The percentage may be lower after the contract has been in force for a certain number of years, or after total premiums paid have reached a certain amount.

Premium tax

Some states charge a tax on annuities. The insurance company pays this tax to the state. The company may subtract the amount of the tax when you pay the premium, when you withdraw your contract value, when you start to receive income payments or when it pays a death benefit to your beneficiary.

Our Expert Advisors are always available to answer your questions. To learn more about charges and fees associated with fixed deferred annuities click here. To speak with an advisor in your area click here. Understanding what is available to you is more important now then ever. Learn How to Retire is part of your educational journey and was developed to help you find the new Safe Money alternatives you need to accomplish your retirement goals. In today's economic environment one must realize that the only way to find success is through individual empowerment. Once you have taken the time to educate yourself you only then have the power to make the right decisions and put the trust factor on your shoulders. The more you know the more you will succeed. LearnHowToRetire.com is "Individual Empowerment" Once you have taken the steps to understand then you are free to find the qualified and trusted advisor to help take your knowledge and formulate a plan. Safemoneyrep.com - "Where People Find Trusted and Qualified Advice".

learnhowtoretire.com

This post was made using the Auto Blogging Software from WebMagnates.org This line will not appear when posts are made after activating the software to full version.

訂閱：文章 (Atom)

2012年9月26日 星期三

2012年9月22日 星期六

2012年9月3日 星期一

2012年9月2日 星期日

2012年8月25日 星期六

2012年8月22日 星期三

2012年8月20日 星期一

2012年9月26日星期三

2012年9月22日星期六

2012年9月3日星期一

2012年9月2日星期日

2012年8月25日星期六

2012年8月22日星期三

2012年8月20日星期一