All annuities are offered by insurance companies
All money goes to and comes from the insurance company directly
|Market stability||Return of principle|
|Tax deferral||Income rider|
|Income options||Long term care|
|Minimum lifetime rate||Nursing home care|
|Guaranteed income for life||Chronic illness|
|Options to choose different strategies||Terminal illness|
|Bonus (free money)|
Annuities are really designed for the long term (7-10 years)
One good practice is wanting your money to grow and have access to a portion of the money for a rainy day. You may choose to get several plans instead of one plan.
Example: Investing 100k – 4 plans 25k each, with one plan having a return of principle. If needed you can access 25k at any time without paying a penalty.
Ceiling fee: This option really raises the cap (the most you can make). This is just one reason you need to be informed on how annuities work and their features. Everyone has their specific needs. So, take it slow before making a decision.
These days, the annuity of choice is an Indexed Annuity (see below)
|Fixed Annuity||Preserves money invested, typically just keeping up with inflation. Cannot lose money invested.|
|Variable Annuity||Has the opportunity for growth, but has a potential for loss.|
|Indexed Annuity||Principle is guaranteed (no chance of losing money invested) and has the potential for growth to outpace inflation.
Based on a stock market index such as the S & P or Dow Jones Industrial Average.
|1-4 Year Annuity||Only recommended if needing liquidity.|
|5 Year Annuity||Is the most common annuity.|
|7-10 Year Annuity||More plans are available “Opens up more doors”|
|10+ Year Annuity||A good choice if having an income rider.|