Annuities

Annuities offer specific benefits. 

Learn about the basic facts of annuities below:

Common Factors Across Different Types of Annuities

  • An annuity is a contract between you and an insurance company

  • Opened with funds that the insurance company will then invest

  • During the savings or "accumulation" phase you are making payments into the annuity, although some can be opened with one lump sum

  • Because of the insurance benefits of annuities there are associated fees

  • Death protection options

  • Living benefit protection options

  • Payments distributed during the payout or "annuitization/income" phase

  • Primarily designed as a retirement investment option

  • Tax-deferred earnings

  • Lifetime income options

Immediate Annuities

  • Income distribution begins right away 

  • Single Premium Immediate Annuities (SPIA) payments begin right away after purchasing through a single premium

  • You can set the "mode," or how often you will receive payments and for how long (your whole life, or for the next 30 years, etc.)

Fixed Annuities

  • Similar to CDs in that the interest rate is set, yet in many cases these will pay higher interest rates

  • Can be a deferred or an immediate annuity

  • Set payouts can offer the convenience of predictability

Deferred Annuities

  • This type of annuity contract delays payments until the investor elects to receive them

  • Can be fixed or variable 

Variable Annuities

  • Variable annuities allow for more account fluctuation up or down

  • Insurance company invests in mutual-fund type investments aka "sub-accounts"

  • Since it is an annuity the insurance company ensures you cannot loose below a certain amount of the account value

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Securities and investment advisory services are offered through Sovereign Global Advisors, Registered Investment Advisor and members of FINRA and SIPC

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