Annuities
An annuity is a contract between an individual and a life insurance company in which the annuitant (the purchaser) agrees to pay the insurance company either a series of payments or a single payment in return for payments to the annuitant for a specified period of time. The amount deposited into the annuity accumulates based on guaranteed interest rates, variable rates, or equity indexed rates.
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Benefits
- Annuities can begin paying you tax free income when you retire.
- With the compounding of tax-deferred earnings the savings in annuities grow at a faster rate than certificates of deposits.
- Annuities offer various investment options including guaranteed life income, they can be structured with minimum guarantees and no risk of loss, they can be index linked and reset.
- Gains are tax deferred and most plans have a no-penalty annual limited withdrawal provision.
- Contributions are unlimited.
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