What is an annuity?

What type of annuity is right for you?

The type of annuity that's right for you will depend on your personal goals, objectives, and risk tolerance.

Multi-Year Guaranteed Annuities

A multi-year guaranteed annuity, or MYGA, offers a predetermined and contractually guaranteed interest rate for a fixed period of time.

  • Less risk

    Since a MYGA offers a guaranteed interest rate for the entire contracted term, it’s considered a less risky investment than a variable or indexed annuity.

  • Flexibility and liquidity

    The ability to take partial withdrawals yearly without a penalty affords flexibility. For example, if you need money to cover a large medical bill you could pull it out of your MYGA, which might be a preferable option to taking money from an IRA or getting a 401(k) loan.

Guaranteed yield to surrender is shown for corresponding surrender period
3 yrs
4 yrs
5 yrs
7 yrs
9 yrs
10 yrs

Traditional Fixed Annuities

Fixed annuities are insurance contracts that pay a guaranteed rate of interest on the account owner's contributions.

  • Predictable investment returns

    The rates on fixed annuities are derived from the yield that the life insurance company generates from its investment portfolio, which is invested primarily in high-quality corporate and government bonds.

  • Guaranteed minimum rates

    Once the initial guarantee period in the contract expires, the insurer can adjust the rate based on a stated formula or on the yield it is earning on its investment portfolio. As a measure of protection against declining interest rates, fixed annuity contracts typically include a minimum rate guarantee.

Current yield to surrender is shown for corresponding surrender period
3 yrs
5 yrs
7 yrs
9 yrs
10 yrs

Fixed Index Annuities

A form of fixed annuity that earns interest due to changes in a market index. Rather than using an interest rate as a benchmark, it uses a stock market index to determine growth.

  • Full protection of principal

    FIA's are protected from the volatility of the markets. Money is never invested in the stock market. Your credit strategy tracks the stock market, but you do not own assets that can lose value.

  • Can potentially provide better rates than CDs

    From 1999 to 2020, many fixed index annuities actually outperformed the indexes they were correlated with. However, while it happens from time to time, they weren't designed to outperform the stock market.

  • An efficient way to plan for future income needs

    Once you annuitize it with a lifetime payout option or turn on the income rider payouts, you cannot outlive that income stream.

Top rates for S&P 500 annual point-to-point accounts with cap
Top guaranteed monthly lifetime payouts from an income rider
Assuming male, $100,000 premium, issue age 55 and commencing at age 65.

How annuities help you retire

Annuities can help ensure a retirement strategy and income that lasts as long as you do, which is likely to be a very long time.

  • Tax-Deferred Growth

    In general, during the accumulation phase of an annuity contract, your earnings grow tax-deferred. You pay taxes only when you start taking withdrawals from the annuity.

  • Predictable Income For Life

    Income riders may be an effective vehicle for lasting financial security. When paired with the right annuity, an income rider can provide a steady income stream for the rest of your life.

  • Death Benefits For Heirs

    The owner can designate a beneficiary to inherit the remaining annuity payments after death. After an annuitant dies, insurance companies distribute any remaining payments to beneficiaries.

  • Certain level of guarantee

    You know what your rate of return will be for a certain period of time with fixed annuities. For seniors looking for a predictable income stream, that may be a better alternative than putting money into equities.

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Offices in Tampa, Los Angeles and Chicago,

Phone number
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Annuity products are offered through independent licensed insurance agents. Product availability, features and rates may vary by state. This information does not represent a recommendation or advice specific to your situation. The annuity information provided comes from sources deemed to be reliable but cannot be guaranteed. Check with the annuity company for current product information, and review all annuity rates, terms, conditions and costs before making a purchasing decision. Annuity guarantees are backed by the financial strength and claims-paying ability of the issuing company.

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