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Insurance and annuity – Dan Sullivan Insurance

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Fixed against variable annuities

In a fixed annuity the insurance company guarantees the principal and a minimum interest rate. In other words, as long as the insurance company is economically speaking, the money you have in a fixed annuity will grow and will not fall in value. The growth of the annuity value and / or the benefits paid can be set at a dollar amount or at an interest rate, or they can grow with a certain formula. The growth in the value of the annuity and / or the benefits paid is not directly or wholly due to the results of the investments made by the insurance company to support annuity. Some fixed annuities pay a higher interest rate than the minimum, via a policy distribution that can be declared by the company's board, if the company's actual investment cost, cost and mortality are perceived to be more favorable than expected. Fixed annuities are regulated by state insurance departments.

Money in a variable annuity is invested in a fund as a fund but an open only to investors in the insurance company's variable life insurance and variable annuities. The fund has a certain investment goal and the value of your money in a variable annuity ̵

1; and how much money is to be paid to you – is determined by the fund's investments (free of charge). Most variable annuities are designed to offer investors many different fund options. Variable annuities are regulated by state insurance departments and the Federal Securities and Exchange Commission.

Types of Fixed Annuities

A stock-indexed annuity is a type of fixed annuity, but looks like a hybrid. It credits a minimum interest rate, just as a fixed annuity does, but its value is also based on the outcome of a particular stock index, usually calculated as a fraction of the index's total return.

A value adjusted annuity is one that combines two desirable properties – the ability to select and fix the time period and interest rate that your annuity will grow on and the flexibility to withdraw money from annuities before the end of the period. This withdrawal flexibility is achieved by adjusting the annuity value up or down to reflect the change in the interest rate market (ie the general interest rate) from the beginning of the selected time period to the time of the withdrawal

Other types of annuity

All following types of annuities are available in fixed or moving forms.

Deferred Annuity Deferred Deferred Annuity Receives Prizes and Investments are Changed for Payment at a Later Time. The payout can be very long; Deferred annuities for retirement may remain in the deferred stage for decades.

An immediate annuity is intended to pay an income a period of time after the immediate annuity has been purchased. The time period depends on how often income is to be paid. For example, if the income is monthly, the first payment comes one month after the immediate annuity is purchased.

Lifetime vs. Late Annuity A fixed period annuity pays an income for a specified period of time, ten years. The amount paid does not depend on the age (or life) of the person purchasing the annuity. Instead, the payments depend on the amount paid into the annuity, the length of the payout period and (if it is a fixed annuity) an interest that the insurance company considers can support the length of the payout period. [19659004] A lifetime annuity yields income for a remaining lifetime (called "annuitant"). A variety of annuity annuities continue income until the other of two annuities dies. No other type of financial product can promise to do so. The amount paid depends on the age of the annuity (or ages, if it is a lifetime), the amount paid into the annuity and (if it is a fixed annuity) an interest that the insurance company considers can support the length of the expected payout period.

With a "clean" lifetime annuity, payments stop when the anniversary dies, even if it is a very short time after they started. Many annuity buyers are uncomfortable with this opportunity, so they add a guaranteed period – essentially a fixed annuity – to their lifetime annuity. With this combination, if you die before the set period ends, your earnings continue to your beneficiaries until the end of that period.

Qualified vs. Non-Qualified Annuity

A Qualified Annuity is a habit of investing and paying money in a tax-restricted pension plan, such as an IRA or Keogh plan or plans governed by the Internal section Revenue Code 401 (k), 403 (b) or 457. According to the plan, money is paid into annuity (called "premiums" or "contributions") not included in taxable income for the year in which it is paid. All other tax provisions that apply to unqualified annuities also apply to qualified annuities.

A ] nonqualified annuity is a purchased separately from or "off" a tax-limited pension plan. Investment income for all annuities, qualified and unqualified, will be deferred until revoked. At that time, they are treated as taxable income (whether they came from selling capital to profit or dividend).

One premium against flexible premium novices

A single premium annuity is an annuity funded by a single payment. The payment can be invested for long-term growth – a single premium deferred annuity – or invested for a short time, after which payment begins – a single premium immediate annuity. Single premium fees are often financed by rollover or from the sale of an estimated asset.

A flexible premium annuity is an annuity intended to be funded by a series of payments. Flexible premium novelties are only deferred annuities; that is, they are designed to have a significant period of payments to annuity plus investment growth before any money is withdrawn from them.

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