Name * Email * Phone Number *

Annuities

What is an annuity?

An annuity is a cash contract with an insurance company. Unlike life insurance products where policy issue and pricing are based largely on mortality risk, annuities are primarily investment products. Individuals purchase or fund annuities with a single sum amount or through a series of payments; the insurer credits the annuity fund with a certain rate of interest, which is not currently taxable to the annuitant. Through this process the annuity grows. The final amount that will be available for payout is calculated through a combination of these factors.

Annuities are composed of two distinct time periods: the accumulation period, during which time funds are being paid into the annuity, and the annuity period, the point at which the accumulation period ends and regular benefit payments are made on a monthly basis.

Diversification

Diversify your investment portfolio with Annuities

Types of Annuities

• FPDA - Flexible Premium Deferred Annuity
• SPIA - Single Premium Immediate Annuity
• SPDA - Single Premium Deferred Annuity
• TSA - Tax Sheltered Annuity

Immediate Annuities

Immediate annuities are designed to make its first benefit payment to the annuitant at one payment interval from the date of purchase. Since most annuities make monthly payments, an immediate annuity would typically pay its first payment one month from the time of purchase. Immediate annuities are funded by a single lump-sum payment.

Deferred Annuities

Deferred annuities provide income payments at some date in the future. A key difference between an immediate annuity and deferred annuity is the way they are funded. A deferred annuity can be funded as a lump-sum payment or in periodic payments over a period of time. Another key difference is that deferred annuities accumulate interest earnings on a tax-deferred basis. While no taxes are imposed during the accumulation period, taxes are imposed once benefits are triggered.

The Power of Tax Deferred Annuities

Income Taxation of Annuity Benefits

Annuity benefit payments are a combination of principal and interest. As such, the portion attributable to return of principal is not taxed; the portion representing interest earned on the declining principal is subject to tax. An "exclusion ratio" is applied to each benefit payment an annuitant receives which can greatly reduce the individual tax burden.

Higher Interest

Historically, Annuities have paid 2 to 5 points higher than bank investments every year since 1951.

How much difference is there today?

Uses of Annuities

• Income for Retirement
• Qualified Retirement Benefits for Employees
• Structured Settlements
• Accumulation Vehicles
• Divorce Decree

9 Reasons to Invest in Annuities

The National Ethics Bureau is an independent organization that promotes consumer confidence by providing a one-stop source to verify the business ethics of insurance and financial advisors. We are a long time member and passed the Ethics Check System, a series of comprehensive background checks for criminal, civil, and business violations. www.ethicscheck.com

Toll Free: 1-800-381-0997 | Fx: 1-866- 879-0331 | E-mail: info@ifgins.com