What Is An Annuity?
Life Insurance Agents can offer you what is called an annuity. An Annuity is a contract in which an insurance company makes a series of income payments at regular intervals in return for a premium or premiums you have paid. Annuities are most often purchased for future retirement income and only an annuity can be guaranteed to pay an income for as long as you live. However, in an annuity, you can name a beneficiary to collect the value of your annuity upon your death.
An Annuity is neither life insurance nor a health insurance policy. It's not a savings account or a saving's certificate such as a CD. In most cases you should not purchase an annuity to reach short-term financial goals. An Annuity is a type of savings strategy, which often yields much better interest earnings than a typical savings account or CD.
Your value in an annuity contract is the premiums you have paid, less any charges or loans, plus interest earned. The insurance company uses this value to determine the amount of benefit that you will receive from the annuity policy.
What Are The Different Types Of Annuities?
Single Premium or Multiple Premium
You pay the insurance company only one payment (deposit) for a single premium annuity. You make a series of payments (deposits) for a multiple premium annuity. There are two kinds of multiple premium annuities. The first is a flexible premium annuity. For the most part, you pay as much premium as you want, whenever you want. In the other kind of annuity, a schduled premium annuity the policy spells out your minimum payment and how often you can make them.
Immediate or Deferred
With an immediate annuity, income payments start no later than one year after you pay the premium. You usually pay for an immediate annuity with a single premium.
The income payments from a deferred annuity often start many years later. A deferred annuity has two parts or periods. During the accumulation period, the premium you pay into the annuity, less any charges or loans, earns interest. These earnings grow tax deferred as long as you leave them in the annuity. During the second period, called the payout or annuitization period, the insurance company pays income to you or to someone you choose.
Walden Associates Insurance Services only represents A.M. Best "A" rated or higher insurance companies, so you can be sure of the security of your money.
Here are some of the major carriers we represent -
