Nevada Annuities http://www.nevada-annuities.com Let's Talk About Annuities Sat, 28 Apr 2012 00:01:30 +0000 en hourly 1 http://wordpress.org/?v=3.3.2 Learn About Flexible Premium Annuitieshttp://www.nevada-annuities.com/learn-about-flexible-premium-annuities/ http://www.nevada-annuities.com/learn-about-flexible-premium-annuities/#comments Thu, 08 Dec 2011 06:31:12 +0000 Nevada Annuity Man http://www.nevada-annuities.com/?p=1507
  • What are Deferred Annuities? Deferred Annuities Deferred annuities are annuity contracts that delay payments...
    • Related posts brought to you by Yet Another Related Posts Plugin.]]>
    flexible premium annuities

    Information on Flexible Premium Annuities

    The true definition of a flexible premium annuity, also known as an FPA, is one with no fixed schedule for payment of premiums. Premiums can be paid for any number of months in a row, then not paid for the next so many months, then paid every other month, etc.

    The other side of that proverbial coin you ask? There is no set amount required to be paid into the annuity in any given year. However, each contract has both minimum and maximum amounts allowed when making deposits.

    These required minimum and maximum deposits depend on the company issuing the annuity contract and the type of annuity contract

    This means in some cases you’ll find that the minimum monthly payment can be something as low as $50.00 or even $25.00 while the maximum monthly payment can be as much as up to four or five figures.

    There are also tax codes you will want to adhere to when it comes to premium deposits. Always make sure to consult a competent professional in regards to tax repercussions.

    Flexible premium annuities are almost always set up as deferred annuities. The idea underlying this type of annuity is rather basic.

    The individual who is paying into the flexible premium contract will not begin to receive payment from the deposits made until many years in the future.


    flexible premium annuity flexible premium annuities

    People select this type of annuity because the payments are easy to make, there is flexibility in the amount they can pay into the contract and the person can decide to schedule payments according to their time frame.

    Upon death, the annuity value of your flexible premium deferred annuity will be paid directly to your beneficiary which avoids the expenses, delays and frustrations of probate.

    Flexible premium annuities are not for everyone. However, as a person starts expanding their investment horizon, flexible premium annuities become a very real consideration.

    In flexible payment annuity, premiums may be flexible, both in terms of amount and frequency. The system can accommodate user specified premium options concerning minimum amounts, maximum amounts, scheduled premiums, and target premiums.

    A flexible premium annuity, depending on the situation, allows a person greater control and flexibility in both the amount invested and the time frame in which to invest the dollars. Flexible premium annuities as stated above are not a universal product by any means.

    Related posts:

    1. What are Deferred Annuities? Deferred Annuities Deferred annuities are annuity contracts that delay payments...

    Related posts brought to you by Yet Another Related Posts Plugin.

    ]]>     http://www.nevada-annuities.com/learn-about-flexible-premium-annuities/feed/ 0     Annuities Pros And Cons, Pros and Cons of Annuitieshttp://www.nevada-annuities.com/annuities-pros-and-cons-pros-and-cons-of-annuities/ http://www.nevada-annuities.com/annuities-pros-and-cons-pros-and-cons-of-annuities/#comments Thu, 25 Aug 2011 14:23:17 +0000 Nevada Annuity Man http://www.nevada-annuities.com/?p=1488 Yet Another Related Posts Plugin.]]> Annuities Pros And Cons

    Annuities pros and cons might not be immediately evident when you first look at annuities as an investment. Annuities are a means of money accumulation for future needs and goals or a source of an immediate income.

    In fact, annuities offer considerable benefits over other kinds of retirement products. This is especially important for people not able or willing to risk losing a portion of their retirement savings.

    Given this is true, what are the associated annuities pros and cons? First, if a person is looking for a lifetime income, an immediate annuity contract is their ticket to that income. Immediate annuities guarantee periodic payments to the annuitant for as long as they live.
    This transfers your longevity risk to the insurance company. Once they accept your premium payment and guarantee to pay you for your life, they are on the hook for as long as you live.

    Of course, the size of your periodic annuity payment is dependent upon the amount of money you now have to purchase the annuity. The larger the premium, the larger the payout. A young annuity buyer’s monthly check will be less than that of an older annuity buyer’s check given the same amount of invested premium.

    Some annuities do not offer inflation protection. This means your monthly payment may be insufficient to cover the need(s) for which you first bought it. However, most of the contracts on the market today include an inflation protection rider. This rider tracks with inflation meaning as inflation goes up, so does your monthly payment.

    Annuities also provide a guarantee called principal protection. This means the value of the annuity is guaranteed to be at or above the amount invested. You can also guarantee that you or your heirs will receive back at least as much money as you originally invested.

    Annuities can save you money on taxes over taking a lump sum payment because you can roll over 401k or IRA funds into an annuity and not pay taxes until you begin to withdraw money from the account.

    Variable annuities are a form of security that provides the owner the opportunity to invest in various core investments. With a variable annuity you accept all the risk. If the core investment(s) go up, your gain may be substantial. On the other hand, if the core investment(s) go down, your loss can also be substantial.

    Sometimes people compare returns on an annuity to various stock market investment returns. Since the stock market can go up like a rocket, the returns will go up. However, there is no guarantee the stock market will go up.

    By the same token, the stock market can go down. When it does, so do the returns. This is the side of the market that makes annuity returns look attractive. Generally speaking, annuity returns are higher than CDs and savings accounts so they are attractive given their tax deferral feature.

    Annuities are almost always less flexible than other retirement options because once you purchase an annuity contract your capital is tied up. In other words, unless you completely surrender your contract, you do not have access to that amount of money.

    Annuities offer two other great features. Because they are life insurance contracts, if the owner states a beneficiary, probate is avoided. The other feature that makes annuities attractive is the bankruptcy exclusion. Annuities most often are excluded from bankruptcy proceedings.

    If you are entering into a complex estate or financial situation, always consult your tax and/or legal counsel. You don’t want to be caught in an argument with the IRS or state government taxing agency.

    Annuities provide an advantage most other investments don’t. They have a state guarantee fund standing behind them. If the company cannot meet its payment obligations, the state guarantee funds take over.

    This almost totally eliminates insurer insolvency risk. In fact, this benefit by itself makes annuities a great product. Keep in mind annuities pros and cons vary by policy. Make sure you completely understand the product before you buy.

    Go Home:

    Nevada Annuities

    No related posts.

    Related posts brought to you by Yet Another Related Posts Plugin.

    ]]>     http://www.nevada-annuities.com/annuities-pros-and-cons-pros-and-cons-of-annuities/feed/ 2     Annuities Explained, an Explanation of Annuitieshttp://www.nevada-annuities.com/annuities-explained-an-explanation-of-annuities/ http://www.nevada-annuities.com/annuities-explained-an-explanation-of-annuities/#comments Mon, 22 Aug 2011 15:54:13 +0000 Nevada Annuity Man http://www.nevada-annuities.com/?p=1480 Yet Another Related Posts Plugin.]]> Annuities Explained, an Explanation of Annuities


    annuities explained

    If you are like most people, having annuities explained makes them easier to understand especially if you are not a finance oriented person. Hence, the simple explanation of annuities is that they are term deposits with insurance companies.

    An annuity can be compared to bank certificates of deposits (CD) but unlike a CD an annuity is not insured by the FDIC. However, the issuing insurance company guarantees its annuities.

    The industry started with two types of annuities, fixed annuities and variable annuities, then added an index annuity. The nice thing about all three types, as far as annuities explained, is they have a lot in common so it makes them easier to understand.

    Fixed annuities are exactly that. A look at their features will illuminate their mechanics. As stated above, your principal is guaranteed by the insurance company. The guarantee states your annuity will never decline.

    You make money each year because the insurance company adds interest to your deposit. The deposit compounds on an annual tax deferred basis.

    The fixed annuity carries a specific term. You decide the term you want. It is fair to say the longer term you select, the higher the interest rate you will receive.


    what is an annuity

    The interest paid on your contract is tax deferred. This means you do not have to report it on your yearly tax return. However, when you begin to withdraw from the contract, you probably will incur a tax obligation.

    Almost all annuities allow you to withdraw 10% of your balance annually without charges. But, if you withdraw more than 10%, you will be faced with surrender charges commonly known as withdrawal penalties.

    Like a CD, fixed annuities offer an initial one-year rate. After this initial period, the rate changes. On the other hand, some companies offer a multi-year guaranteed rate. This means the quoted rate is the locked-in rate for the entire guaranteed period.

    A variable annuity revolves around mutual funds because your premium is invested in mutual funds.

    Therefore, you are not receiving interest from the insurance company or financial institution selling it. Variable annuities do not have guarantees. Hence, your investment may go up or you could lose principal. Obviously, this depends on the mutual funds you select.

    Index annuities could be called a hybrid annuity. Like a fixed annuity, your principal is guaranteed. However, the interest paid is split into two components. One is a declared side of the contract with the other side of the contract tied to an index. The S&P 500 Index is the most common index used by insurance companies.

    Some index annuities do not have a declared rate side of the contract so all of the premium is tied to the index. This means your principal is guaranteed but your interest isn’t. If the index rate rises, you could get a substantial interest payment. However, if the index goes down, you won’t lose any principal but you won’t get any interest either.

    Always use Nevada Annuities to get annuities explained properly and completely.

    Go Home:

    Nevada Annuities

    No related posts.

    Related posts brought to you by Yet Another Related Posts Plugin.

    ]]>     http://www.nevada-annuities.com/annuities-explained-an-explanation-of-annuities/feed/ 0     Cash in an Annuity to Pay Off Debt : Your Last Choicehttp://www.nevada-annuities.com/cash-in-an-annuity-to-pay-off-debt-your-last-choice/ http://www.nevada-annuities.com/cash-in-an-annuity-to-pay-off-debt-your-last-choice/#comments Fri, 19 Aug 2011 14:35:15 +0000 admin http://www.nevada-annuities.com/?p=1474 Yet Another Related Posts Plugin.]]> Cash in an Annuity to Pay Off Debt : Your Last Choice

    Annuity or pension funds are designed to provide you financial support during your retirement days. It requires long term dedication and saving to build up a good pension fund. However, sometimes circumstances compel you to cash in on an annuity. The proceeds are sometimes used to pay off debts. However, whether or not this is a good option, depends upon your specific circumstances. Anyways, before taking the decision to cash in an annuity to pay off debts, you need to consider a lot of things. In fact taking recourse to cashing in an annuity to become debt free is regarded as the last option available to you.

    When you are faced with credit card debts, it may be very tempting for you to cash in on an annuity to become debt free. However, this is regard as the last resort because of the following reasons.

    * If you want to encash your annuity prematurely, you have to pay surrender charges and other fees. In other words, you are actually giving up a portion of your annuity so as to become free of unsecured debts.
    * If you use up a portion of your annuity, you end up losing huge amount of interest. If you leave your annuity untouched, the amount grows up at a compound rate of interest. The loss of interest may sometimes be higher than your unsecured debts. Moreover, if you cash in on your annuity prematurely, you have to pay huge penalty.
    * Besides, you need to consult your creditors before opting for any debt reduction strategy. Many credit card companies are willing to work out debt repayment plan for you by either reducing the interest rate, by increasing the term of the debt or by a combination of these two. So, you should consult your creditors before you opt for any debt elimination strategy. Moreover, there are few excellent debt relief programs, such as debt consolidation or debt settlement program, available at the market place. You can explore one such option in order to become debt free.

    Though, cashing in on your annuity is considered as the last option available to you to pay off your debts, but in some cases you may think of treading this route.

    1. Nothing can be more important than life. So if you or someone who is very close to you is suffering from terminal disease, you should not hesitate to cash in on your annuity.
    2. If you are almost on the verge of losing your home, one solution could be opting for cashing on an annuity. It is very important to have your own home for your peace of mind.

    Unless there are some special circumstances, you should not opt for cashing in on your annuity.

    No related posts.

    Related posts brought to you by Yet Another Related Posts Plugin.

    ]]>     http://www.nevada-annuities.com/cash-in-an-annuity-to-pay-off-debt-your-last-choice/feed/ 0     What are Annuity Products, What are Annuities?http://www.nevada-annuities.com/what-are-annuity-products-what-are-annuities/ http://www.nevada-annuities.com/what-are-annuity-products-what-are-annuities/#comments Mon, 08 Aug 2011 00:47:46 +0000 Nevada Annuity Man http://www.nevada-annuities.com/?p=1460 Yet Another Related Posts Plugin.]]> What are Annuity Products, What are Annuities?

    Annuity products are regulated by three levels of government. The federal government regulates variable annuities through the Securities and Exchange Commission and the Financial Industry Regulatory Authority, Inc. The state governments regulate annuities through their respective Insurance Department. All annuities have to comply with the Internal Revenue Code.

    It does not make a difference what kind of annuity you purchase in the U.S. It does not make a difference because an annuity is a contract created when an individual gives the life insurance company money today for an income in the future. The interest paid on the deposit grows tax-deferred. This means you will not pay taxes on the money earned in interest until you access the money.

    All annuity contracts have the option for a guaranteed distribution of income until the death of the person or persons named in the contract. This feature is what sets annuities apart from other investment type vehicles.

    Life insurance companies are the only entity that may issue an annuity in the U.S. with one exception. Private annuity contracts may be arranged between donors to non-profits to reduce taxes. People wishing to make charitable contributions to the charity of their choice almost always use a life insurance product like the annuity.

    Because insurance companies are regulated by each state, some contracts and options available in some states may not be available in others. That isn’t true for their federal tax treatment because, as stated above, they are governed by the Internal Revenue Code.

    All annuities have two of what are termed phases. The first phase is called the deposit phase or the accumulation period. In the deposit phase, the annuitant deposits money and accrues interest on that money in the account value of the contract. The contract itself will most commonly be referred to as an account, but don’t confuse the two terms.

    The second phase is called the payout or deferral phase. In this phase, the annuitant receives payments for some period of time. The industry refers to this payout time frame as the annuitization period or income phase.

    As the name implies, this is the phase in which the insurance company makes income payments. The payments almost always are set for a stated period of time. This may be for five years, ten years or they may continue until the death of the annuitant(s). As long as all annuitants are named in the contract, they can receive the payments.

    Because some people want to receive an immediate income, the industry has created an annuity called an immediate annuity. An immediate annuity starts the payout phase usually within one month from the date of purchase. This eliminates the deposit phase as the money is deposited in one lump sum. Keep in mind annuity products don’t fit everyone’s current situation.

    Go Home:

    Nevada Annuities

    No related posts.

    Related posts brought to you by Yet Another Related Posts Plugin.

    ]]>     http://www.nevada-annuities.com/what-are-annuity-products-what-are-annuities/feed/ 0     What is an Annuity and How Does it Work?http://www.nevada-annuities.com/what-is-an-annuity-and-how-does-it-work/ http://www.nevada-annuities.com/what-is-an-annuity-and-how-does-it-work/#comments Sat, 06 Aug 2011 23:54:08 +0000 Nevada Annuity Man http://www.nevada-annuities.com/?p=1457 Yet Another Related Posts Plugin.]]> Find out How Annuities Work

    As baby boomers rocket towards, in large numbers I might add, retirement market volatility is becoming scarier and scarier. Everyday more boomers are looking for secure places to keep their money. As a licensed insurance agent I feel obligated to discuss how annuities work.
    Like most things you’ll find in life, annuities have pros and cons. An annuity is a contract issued by an insurance company. The insurance company guarantees to pay the annuitant or beneficiary, who can also be the owner or purchaser, a set amount of time in the future spread over a stated period of time.
    Everyday more and more people become receptive to annuities because of the substantial benefit they offer over other types of retirement vehicles. Annuities have been designed with one specific intention in mind, retirement planning or saving. That is how annuities are intended to be used.
    In fact one feature of an annuity helps to ensure this happens. If in any given year of the contract you withdraw more than the “free-withdrawal-amount” prior to 59 ½ you could be subject to income taxes, penalty taxes and even surrender charges may apply.
    Let’s say you start your annuitization after 59 ½. More than likely you are in a lower tax bracket and taxes won’t account for as much of it. Maybe you don’t need the money at this time. You always have the ability to **continue** the annuity growing in its tax deferred status. It can keep rolling over accruing interest tax free.
    Long story short an annuity is a savings vehicle intended to help plan and then sponsor your retirement years. They provide tax benefits while allowing the money to grow at a guaranteed rate. When you start withdrawing the money, depending on your age, you’re in a lower tax bracket.
    Some annuities even offer a guarantee on your principal. With just those factors in mind hopefully you can see why annuities are a vital tool in planning your retirement years. After all, who wants to run out of money in their eighties?
    **Quick Disclaimer**
    As with anything that involves your money make sure you perform due diligence as well as consult with licensed professionals when considering purchasing any financial product or making any investment. Read everything you can, ask every question you want and confer with multiple licensed professionals to make sure you understand everything if you have to.
    Financial Planning Through Annuities.
    Don’t be the one who hasn’t started planning your retirement now that you know how annuities work. If nothing else start looking at ways to start saving for retirement today. There are methods for annuitization that also help you avoid tax liability.

    Go Home:

    Nevada Annuities

    No related posts.

    Related posts brought to you by Yet Another Related Posts Plugin.

    ]]>     http://www.nevada-annuities.com/what-is-an-annuity-and-how-does-it-work/feed/ 0     The Definition of a Fixed Annuity, What is a Fixed Annuityhttp://www.nevada-annuities.com/the-definition-of-a-fixed-annuity-what-is-a-fixed-annuity/ http://www.nevada-annuities.com/the-definition-of-a-fixed-annuity-what-is-a-fixed-annuity/#comments Thu, 04 Aug 2011 22:47:01 +0000 Nevada Annuity Man http://www.nevada-annuities.com/?p=1451
  • Learn About Fixed Annuities, Fixed Annuities Definition What You Should Know About Fixed Annuities Fixed annuities are...
    • Related posts brought to you by Yet Another Related Posts Plugin.]]>     Fixed Annuity Definition

    Before you know if a fixed annuity is correct for you, you have to know what it is. A fixed annuity is an insurance contract in which the insurance company makes fixed dollar payments to the annuitant for the term of the contract. The term is usually until the annuitant dies. The insurance company also guarantees both earnings and principal.

    To make it easier to understand, consider a fixed annuity in the same tone as a CD. Like CDs, they pay guaranteed rates of interest which are, in many cases, higher than bank CDs. They also come in time frames like CDs.

    Fixed annuities come in two types: deferred or immediate. The deferred annuity accumulates at regular rates of interest while the immediate kinds make fixed payments. The factors that decide the amount of these payments are your age and the amount deposited into your annuity.

    For anyone wanting the convenience and predictability of a set payout, a fixed annuity is more than likely a safe bet. The set payouts give retirees a known income stream to supplement their other retirement income. This is a very helpful financial benefit.

    Because fixed annuities pay guaranteed rates of interest, they are appealing to investors who are wary of the stock market’s ups and downs. Top that off with their low investment minimums – usually $1,000 to $10,000 – and couple it with the fact that the interest they pay escapes taxation until you pull it out, makes them very popular.

    A fixed annuity can have rates fixed for a limited period. After that period, they can drop. For example, they can drop as early as the first year anniversary date. That means once the annuity is one year old, the rate can change to a new rate that called a declared rate. This can be higher or lower than the first year rate.

    If you don’t like the new rates and want to withdraw your money early, heavy surrender charges could kick in and cut into your returns. These are called penalties. Always ask if your annuity has such penalties. And while you’re asking about penalties involved with annuities, go ahead and inquire about the fees that are associated with the specific product.

    You should also know that once you decide to opt for fixed lifetime payments, those payments will not rise. They are fixed. So, if inflation heats up, your payment won’t rise to keep pace. You don’t have to be a financial guru to know the value of the money you receive will decline over time as inflation erodes the purchasing power of each dollar.

    On the other hand, if you’re worried about not having enough money on which to retire, a fixed annuity can help you relieve that worry. A fixed annuity offers the stability retirees want since they don’t want to outlive their money. At the very least, they know they will have money to cover their fixed expenses.

    Go Home:

    Nevada Annuities

    Related posts:

    1. Learn About Fixed Annuities, Fixed Annuities Definition What You Should Know About Fixed Annuities Fixed annuities are...

    Related posts brought to you by Yet Another Related Posts Plugin.

    ]]>     http://www.nevada-annuities.com/the-definition-of-a-fixed-annuity-what-is-a-fixed-annuity/feed/ 0     Learn About Fixed Annuities, Fixed Annuities Definitionhttp://www.nevada-annuities.com/learn-about-fixed-annuities-fixed-annuities-definition/ http://www.nevada-annuities.com/learn-about-fixed-annuities-fixed-annuities-definition/#comments Tue, 02 Aug 2011 22:25:37 +0000 Nevada Annuity Man http://www.nevada-annuities.com/?p=1449 Yet Another Related Posts Plugin.]]> What You Should Know About Fixed Annuities

    Fixed annuities are insurance contracts in which the insurance company makes fixed dollar payments to the annuitant for the term of the contract. The annuitant is the person receiving the payment and the term is usually until the annuitant dies.
    The beauty of fixed annuities is that the insurance company also guarantees both earnings and principal. This transfers the financial risk squarely onto the insurance company.

    To help understand the concept underlying a fixed annuity, consider a fixed annuity in the same light as a CD. CDs as everyone knows pay guaranteed rates of interest. A fixed annuity also pays guaranteed interest. An annuity rate of interest in many cases is going to be higher than bank CDs.

    Fixed annuities also come in time frames just like CDs. Annuity time frames are generally longer than CD time frames. The reason is the difference in objectives. CDs are short term investments while annuities are long term investments.

    Fixed annuities come in two types: deferred or immediate. The deferred annuity accumulates at regular rates of interest while the immediate kinds make fixed payments. The determining factors for the amount of these payments are your age and the amount of your annuity.

    For anyone wanting the convenience and predictability of a set payout, a fixed annuity is a popular vehicle. The set payouts give retirees a known income stream to supplement their other retirement income. This is a very helpful financial benefit.

    Because fixed annuities pay guaranteed rates of interest, they are appealing to investors who are wary of the stock market’s ups and downs. Top that off with their low investment minimums – usually $1,000 to $10,000 – and couple it with the fact that the interest they pay escapes taxation until you pull it out, makes them very popular.

    A fixed annuity can have rates fixed for a limited period. After that period, they can drop. For example, they can drop as early as the first year anniversary date. That means once the annuity is one year old, the rate can change to a new rate that called a declared rate. This can be higher or lower than the first year rate.

    If you don’t like the new rates and want to withdraw your money early, heavy surrender charges could kick in and cut into your returns. These are called penalties. Always ask if your annuity has such penalties.

    You should also know that once you decide to opt for fixed lifetime payments, those payments will not rise. They are fixed. So, if inflation heats up, your payment won’t rise to keep pace. You don’t have to be a financial guru to know the value of the money you receive will decline over time as inflation erodes the purchasing power of each dollar.

    On the other hand, if you’re worried about not having enough money on which to retire, a fixed annuity can help you relieve that worry. A fixed annuity offers the stability retirees want since they don’t want to outlive their money. At the very least, they know they will have money to cover their fixed expenses.

    Go Home:

    Nevada Annuities

    No related posts.

    Related posts brought to you by Yet Another Related Posts Plugin.

    ]]>     http://www.nevada-annuities.com/learn-about-fixed-annuities-fixed-annuities-definition/feed/ 1     What is an Immediate Annuity?http://www.nevada-annuities.com/what-is-an-immediate-annuity/ http://www.nevada-annuities.com/what-is-an-immediate-annuity/#comments Sun, 31 Jul 2011 20:28:21 +0000 Nevada Annuity Man http://www.nevada-annuities.com/?p=1441 Yet Another Related Posts Plugin.]]> What is an Immediate Annuity?

    An immediate annuity, is a financial contract between an insurance company and an annuity holder. As the name suggests, the annuity holder will receive payments from the insurance company soon after the signing of the contract. The payments almost always run for the life of the annuity holder.

    Immediate Annuities which are also known as single premium immediate annuities or immediate income annuities were originated in the 1860s by the Equitable Life Assurance Company. Way back then they had a different name though, they were called tontines. The individual paid a lump sum to the Equitable and in return received guaranteed, lifetime income payments.

    As one could certainly imagine these contracts became enormously popular as time moved on. Over the course of the next 40 – 50 years, the tontine, or financial contract, took on the name of its plan of payment – annuity. And that is how you and I know it today.

    Then came another twist happened the twentieth century. The insurance companies learned they could also defer the payment of annuities. That is, they could accept either a lump sum payment or regular payments over a period of time and not have to begin paying out immediately.

    This gave annuity contracts a dual personality. These new annuities were called deferred annuities because the payment to the contract holder was deferred out to some future point in time.

    With a deferred annuity there are two phases. The first is known as the accumulation phase, in which the company invests the payments made by the holder. The second is the distribution phase, also known as the annuitization period, in which the company distributes the invested earnings to the holder over the remainder of his or her life.

    Annuities lacking this payment postponement feature are immediate annuities. The first payment in an immediate annuity contract is made in accordance with the payment-frequency terms stipulated in the contract. They could be made in monthly, quarterly, semi-annual or annual payments.

    A holdover from the last century that still exists today is the standard distribution plan. This being a lifetime distribution meaning the annuity holder receives level payments for the remainder of his or her life.

    When the holder dies, the insurance company claims any remaining undistributed funds. The insurance company calibrates the annuity payout to the holder’s life expectancy. That is just one method the insurance company uses to guarantee a life time payout.

    No related posts.

    Related posts brought to you by Yet Another Related Posts Plugin.

    ]]>     http://www.nevada-annuities.com/what-is-an-immediate-annuity/feed/ 0     Variable Annuities Explained, How Variable Annuities Workhttp://www.nevada-annuities.com/variable-annuities-explained-how-variable-annuities-work/ http://www.nevada-annuities.com/variable-annuities-explained-how-variable-annuities-work/#comments Sat, 23 Jul 2011 13:01:56 +0000 Nevada Annuity Man http://www.nevada-annuities.com/?p=1420 Yet Another Related Posts Plugin.]]> Variable Annuities

    Variable annuities are contracts between an insurance company and an individual. We’ll say “you” is the individual. In the terms of this contract the insurer agrees to make periodic payments to you. These payments will begin either immediately or at some time in the future depending on what you chose. You can purchase a variable annuity by making either a single lump sum payment or a series of deposits or purchase payments known as premiums. Quite literally these choices are up to you.

    Moving on, variable annuities usually offer a range of investment options. The value of a variable annuity can vary greatly depending on the performance of the investment options you chose. Typically there are three investment options available for these types of products. You will find these three options usually consist of mutual funds that invest in stocks, bonds, money market instruments, or any combination of the three.

    Even though a variable annuity is typically invested in mutual funds, variable annuities differ from mutual funds in three distinct ways:

    1. Variable annuities are set-up so you receive periodic payments for the rest of your life. And fear not, your beneficiaries life too in the case of your death. This can also be used as a tool that helps you protect against the possibility of outliving your retirement.

    2. A variable annuity provides a death benefit. This means if you die before the payments have started, your beneficiary will receive a specified amount generally speaking this is at least the amount of your premiums. This works out particularly well for your beneficiary if, at the time of your passing, the account value of your variable annuity is less than the guaranteed amount.

    3. And last but not least, and certainly important, variable annuities grow tax-deferred. This simply means you do not pay taxes on the income or investment gains from the contract until you start withdrawing money. You also have the option of transferring the money from one investment option to another without being taxed. Keep in mind when you start withdrawing your money from a variable annuity you are taxed on the earnings at ordinary income tax rates rather than lower capital gains rates.

    In summation, the benefits of tax deferred growth in a variable annuity outweigh the costs if you intend to keep it as a long-term investment, ten to fifteen years at least, to meet your retirement and any other long-range goals you might have like college funds.

    Go Home:

    Nevada Annuities

    No related posts.

    Related posts brought to you by Yet Another Related Posts Plugin.

    ]]> http://www.nevada-annuities.com/variable-annuities-explained-how-variable-annuities-work/feed/ 2