Types of annuities
There are generally three major types of annuities — fixed, indexed, and variable and a few additional types. [Also see: The Pros and Cons of Annuities]
In a fixed annuity, the insurance company agrees to pay you no less than a specified rate of interest during the time that your account is growing. The insurance company also agrees that the periodic payments will be a specified amount per dollar in your account. These periodic payments may last for a definite period, such as 20 years, or an indefinite period, such as your lifetime or the lifetime of you and your spouse. Although they have characteristics similar to those of a certificate of deposit (CD) issued by banka, the terms are typically longer. Fixed annuities are not securities and are not regulated by the SEC.
An Immediate annuity is an insurance product in which you trade a specified lump sum of money for a stream of income. In most cases Immediate Annuities are fixed annuities. are not securities and are not regulated by the SEC.
In an indexed annuity, the insurance company credits you with a return that is based on changes in an index, such as the S&P 500 Composite Stock Price Index. Indexed annuity contracts also provide that the contract value will be no less than a specified minimum, regardless of index performance. An indexed annuity may or may not be a security. Most indexed annuities are not registered with the SEC.
Equity Indexed Annuity
Similar to a fixed annuity but with gains indexed to equity markets. In contrast to fixed annuities, Equity Indexed Annuities similar to indexed annuities.
In a variable annuity, you can choose to invest your purchase payments from among a range of different investment options, typically mutual funds. The rate of return on your purchase payments, and the amount of the periodic payments you eventually receive, will vary depending on the performance of the investment options you have selected. Variable annuities have similar characteristics to those of a mutual funds or mutual fund portfolio and are securities regulated by the SEC. [See Video: Getting to Know Annuities]
The Sunvalley Insurance team can help you select the best fixed annuity designed to help you protect your financial future.
For more information contact us today and ask for your free no-obligation quote.We will help you explore a variety of insurance options and discounts. Call us at +1 800 645 0297 or email us. Alternatively, have an insurance-licensed Sunvalley Insurance representative contact you.