New Location: Best CD Rates Types of Annuities
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New Location: Best CD Rates

Information to help you pick the best annuity for your needs including "Key Feature Comparison Tables."

Annuity:  Definintion from the SEC:  "An annuity is a contract between you and an insurance company, under which you make a lump-sum payment or series of payments. In return, the insurer agrees to make periodic payments to you beginning immediately or at some future date. Annuities typically offer tax-deferred growth of earnings and may include a death benefit that will pay your beneficiary a guaranteed minimum amount, such as your total purchase payments."

Like most insurance products, you save money if you can "self insure."  Most people are not equiped to understand how these complex products work so they pay "experts" fairly high fees in exchange for "peace of mind."

Deferred Annuity:  Either variable of fixed, a deferred annuity is funded with either a lump sum or through a series of smaller contributions. Earnings accumulate tax-deferred on your investment until you are ready to retire. Once you have accumulated the money you will need for retirement, you have many options about when and how you receive your income.

Equity Indexed Annuity:  A contract between you and an insurance company. During the accumulation period – when you make either a lump sum payment or a series of payments – the insurance company credits you with a return that is based on changes in an equity index, such as the S&P 500 Composite Stock Price Index. The insurance company typically guarantees a minimum return which vary. After the accumulation period, the insurance company will make periodic payments to you under the terms of your contract, unless you choose to receive your contract value in a lump sum.  You can lose money with an equity indexed annuity if you close it early where the surrender charges are significant.  more info 

Income Annuity:  Funded with a lump sum contribution, automatically securing you or your beneficiary a steady stream of income payments for the rest of your life, or for a specific period of your choosing.

Variable Annuity: 

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  First and foremost, I don't sell annuities or CDs.   I write for several web sites about investing and I edit an investment newsletter where I teach people my "core and explore" approach to investing. Core means place 80 to 99% of your money into a CORE portfolio of well diversified, buy-and-hold, no load mutual funds, ETFs and or blue chip stocks then Explore with the remainder as you learn.  
(More Info) and  (Click for Free Sample Issue)
I am also compensated by advertisers on this site.

I also co-edit "The Retirement Advisor."   Get a Free Fixed Income Primer on page 2 of The Retirement Advisor

Questions:  If you have any questions about annuities or insurance products, my good friend Carol Sun can help you.  Website and email Carol Sun. Note, she sells insurance.  If you want to remain anonymous, then you can post your questions at Suite101 here.


Updated 11/20/07