Overview about Annuities

2. OVERVIEW OF ANNUITIES
Annuities offer primarily a source of income, either now or at some future date established,
such as retirement. In addition, an annuity also has a tax advantage. For example, a deferred
annuity accrues interest on tax-deferred until you withdraw the funds.

3. AN ANNUITY IS RIGHT FOR YOU?
Annuity products offered mainly a source of income, either now or at some future date
established, such as retirement. If this is not what you're looking for, then you should
consider other types of investments. An annuity involves a long-term commitment.
There are other more appropriate investment for those seeking opportunities in the short
term (ie less than a decade). Could consult a trusted financial advisor who does not have a
particular interest in the election of their investment.
Many annuity marketing programs urge you to transfer funds from certificates of deposit to
beat annuities. These are not comparable because investment instruments have different
purposes and time. Make sure you invest your money in a way that best suits your needs.
Recent legislative changes now require companies and insurance agents offering annuity
products to adults over 65 years clearly documenting the basis for selling the product,
including consideration of the financial statement and tax the elderly and also investment
objectives.

4. AN ANNUITY IS RIGHT FOR YOU?
You should consider all the consequences if you currently have funds in an annuity and you
experience the opportunity to transfer funds to a new annuity with a new scheme of
cancellation charge. In addition, the minimum guaranteed interest rate on the new contract
may be lower. Be sure to consider both the advantages and disadvantages of purchasing
replacement.
You should review the entire plan, considering factors such as the guaranteed interest rate,
cancellation charges and administrative fees and maintenance. A high interest rate during
the first year is not always the best option. This is especially true if interest rates fall to a low
minimum rate the following year with high cancellation charges and additional fees.

5. WHAT IS AN EXPIRATION DATE?
The expiration date is determined when you buy an annuity. It's the date on which you can begin
receiving your annuity payments. The day of the due date will be asked to choose a settlement option.
The liquidation option determines how you receive your annuity payments.

6. QUESTIONS YOU SHOULD ASK YOUR AGENT OR INSURANCE COMPANY?
• What is the minimum guaranteed interest rate?
• Do they include any additional charges to my cousin?
• Can charges deducted from my contract value and when?
• What are the cancellation charges or penalties if I terminate my contract early and withdraw all my
money?
• How many years I will be subject to cancellation charges?
• Can I make a partial withdrawal without paying fees or penalties or lose the interest earned?
• Am I exempt from the charges deducted from my annuity if I am confined to a nursing home or if I
was diagnosed with a terminal illness?
• What are my options when my annuity income reaches its expiration date?
• What is the benefit for my death?
• Can decrease the value of the annuity or interest earned?
• Does increasing interest during the term of the contract?
• What is your commission for this product?

7. WHAT ARE THE MOST COMMON TYPE OF ANNUITIES?
• Single Premium
• Flexible Premium
• Immediate Annuities
• Deferred Annuities
• Fixed Annuities
• Equity Indexed Annuities
• Variable Annuities

8. WHAT ARE THE MOST COMMON TYPE OF ANNUITIES?
Single Premium: An annuity that is purchased by paying one lump sum to the insurance company as
premium.
Flexible Premium: An annuity that is purchased by paying multiple premiums to the insurance
company.
Immediate Annuities: With an immediate annuity, you pay a single premium and immediately start
receiving payments at the end of each payment period, Which is usually monthly or annually.

9. WHAT ARE THE MOST COMMON TYPE OF ANNUITIES?
Deferred Annuities: A deferred annuity is established by you paying one or more premiums over what is
referred to as accumulation period. The premiums you pay and the interest credited to the premiums
goes into a fund called an accumulation fund.
There may be a guaranteed minimum interest rate at Which your money will accumulate during the
accumulation period. The annuity payments you receive will begin at a future point in time called the
maturity date. You will receive payments during a time period called the payout period. You do not pay
income taxes on the interest earned during the accumulation period unless you withdraw funds from its
cash value. These taxes are deferred until the payout period.

10. WHAT ARE THE MOST COMMON TYPE OF ANNUITIES?
Fixed Annuities: A fixed annuity provides fixed-dollar income payments backed by the guarantees in the
contract. You can not lose your investment Once your income payments begin. The amount of those
payments will not change. With fixed annuities, the company bears the investment risk.
Equity Indexed Annuities: Is an annuity, either immediate or deferred, that earns interest or provides
benefits that are linked to an external equity index, such as Standard and Poor's 500 Composite Stock
Price Index. When you purchase an equity-indexed annuity, an insurance contract you not own shares
of any stock or index.
Variable Annuities: Variable annuity investments are securities, Which Tend to fluctuate with economic
conditions. The value of a variable annuity depends upon the value of the underlying investment
portfolios associated with the annuity. The owner bears the investment risk for the value of the
security. The value of the annuity will increase with a favorable performance of the security investment.
The annuity's value will decrease with a poor investment performance. In fact, you can lose your
investment. A product receives the classification of a variable annuity if the value either during the
accumulation period or the payout period depends on the value of the security. Some variable annuities
Provide a choice of either a variable payout or a fixed payout.

11. ADVISE ON ANNUITIES
Consumer Alert on Indexed Annuities Policyholders
Verify before you buy
Contact us to verify the license of the agent and the insurance company before signing an application
for a policy.
Check your contract carefully
As with any insurance product, always check the contract and understand the terms and conditions, as
these will vary from one policy to another. Ask the agent and / or company to explain anything you do
not understand. Do this before the end of the review period for free. The review period gives free at
least 14 days to review the contract once you receive it. During the review period for free, you can
return the contract and request a full refund.
Guides on Annuities
The guides are excellent tools if you are looking for a specific type of insurance and want to get a better
understanding of all aspects of the product before purchase.
Be careful when attending seminars for seniors
The seminars are a common way in which annuity providers market their particular products.
Sometimes the invitation to a free meal is actually an invitation to a sales seminar. These seminars and
the subsequent follow-up visit may involve pushy sales tactics. Be sure to complete the questions in the
section entitled "What questions should ask your agent or insurance company?