Different Types ofAnnuities Explained                   by The Annuity Report 2011   Different Types of Annuities Explained
Immediate- you give a company a lump sum of cash now inexchange for an income stream over time.Fixed- Lump sum or premiums...
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Different types of annuities explained

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Different types of annuities explained

  1. 1. Different Types ofAnnuities Explained by The Annuity Report 2011 Different Types of Annuities Explained
  2. 2. Immediate- you give a company a lump sum of cash now inexchange for an income stream over time.Fixed- Lump sum or premiums paid over time thataccumulate, tax deferred, and at a fixed rate establishedannually by the issuing company. At some future point, principle and interest will be returned to the buyer or the accumulated value can be annuitized to turn the account into an income stream.Variable – Rather than the certainty of a fixed rate, theVariable Annuity offers a variable rate of return generatedfrom sub-accounts, usually mutual funds and bonds, duringyour accumulation phase. The key here is that you are invested in the securities market and subject to the whims of an unstable asset. So, variable annuities don’t carry the same principle and growth guarantees that other types of annuities offer. Because variable annuities are securities products they are also regulated by the SEC and can only be sold by registered securities representatives.Fixed Index- This is basically a fixed annuity with a differentmethod of crediting interest. The principle account balance isprotected from downside loss and appreciation is based onthe performance of an external market index. Different Types of Annuities Explained

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