|
Should You Consider a Fixed Annuity?
Fixed Versus
Variable Annuities
When to Consider Variable Annuities
Both fixed and variable annuities can be important components of your
long-term savings or investment portfolio. Each type of annuity has its own
particular advantages and disadvantages. Both offer the potential for
tax-deferred growth.
Choosing between Variable and Fixed Annuities
Below are some elements delineating the difference between the fixed and the
variable annuity.
Fixed Annuities
Fixed annuities offer tax-deferred growth. The earnings on your contract will
not be taxed until they are withdrawn. That means the capital that would
ordinarily go to the tax collector will instead accumulate interest for you.
Over the life of your contract, that tax deferral can make a significant
difference in your earnings. In addition, fixed annuities offer a fixed rate of
return. You know the rate of return at the beginning of each period — and that
security can be very comforting. Finally, fixed annuities offer a death benefit.
If the annuitant dies before payout, his or her beneficiaries will receive all
the purchase payments plus any accumulated earnings.
Variable Annuities
Variable annuities offer many of the same benefits as fixed annuities,
including tax-deferred growth and a death benefit. Unlike fixed annuities,
however, you control where the value in your contract will be invested. Within
the limits of the investment divisions, you can be as aggressive or as
conservative as you’d like. This gives a variable annuity the potential for
higher returns than a fixed annuity. Remember however that this potential for
higher returns requires you to assume a greater risk of loss.
Annuity Choice in Brief
The type of annuity contract you choose, then, depends on what function you’d
like it to fill in your savings and investment portfolios.
Both fixed and variable annuities offer tax-deferred growth and a death
benefit. But where a fixed annuity offers a fixed rate of return, a variable
annuity offers some flexibility.
If you need an addition to your portfolio that offers stable, tax-deferred
growth with high security, a fixed annuity could be just what you’re looking
for.
On the other hand, if you’re looking for a tax-deferred investment that will
let you take a more active role, a variable annuity could be right for you.
Whichever you choose, an annuity contract can be an attractive addition to
your investment and savings portfolio.
Please remember that withdrawals made from an annuity prior to age 59½ may be
subject to a 10 percent penalty. Generally, surrender charges apply if
withdrawals are made in the early years of the policy. An annuity's benefits are
contingent upon the claims-paying ability of the issuing insurance company.
Variable annuity sub-accounts fluctuate with changes in market conditions and,
when surrendered, your principal may be worth more or less than the original
amount invested.
|
Annuity Quote Request
The quote you have requested requires that you complete the following
survey as completely and accurately as possible. Once submitted the
information will be e-mailed to our office(s) and we will expedite your
request. This information will be kept confidential and will be used
for quote purposes only.
We look forward to serving you. |
|
|
| 
