Frequently Asked Questions

What is an annuity?
To put it simply, an annuity is a contract between an individual (called the annuity owner) and an insurance company for a guaranteed interest-bearing policy with guaranteed annuity income options. (Please visit the Learning Center for more information.)

What is the major advantage of annuities?
All annuity dollars are able to accumulate interest completely tax deferred. This means an individual can delay taxation of growth until the money is needed and therefore earn triple interest — interest on the principal, interest on the interest and interest on the money that normally would be paid in taxes. (Please visit the Learning Center for more information.)

Is an annuity safe?
Yes — with annuities, your principal is 100% safe and you are guaranteed to earn at least a minimum interest rate. This guaranteed safety is possible because each insurance company issuing annuities is supervised and regulated by each state’s insurance department; plus, they are backed by a Legal Reserve System and a Guaranty Fund. (Please visit the Learning Center for more information.)

Who should consider purchasing an annuity? Anyone who wants a safe way to accumulate funds through triple compounding without paying current taxes on earnings should definitely consider purchasing an annuity.

What kinds of dollars can be used to buy annuities? Dollars from maturing CDs, money market funds, checking and savings accounts, mutual fund accounts, stocks and bond funds, IRA rollovers, etc. can all be used to purchase an annuity.

Will an annuity be tied up in probate proceedings? No — as long as the owner designates a “named” beneficiary other than his or her estate, the beneficiary will receive the annuity dollars without the delay, expense and hassles of probate proceedings.

Is an annuity identical to an IRA? No. Although an annuity is often used as the funding vehicle for an IRA, many annuities are purchased with after-tax dollars that are not deductible. Also, with annuities, there are not government-imposed limits on how much an individual can contribute to an annuity.

How can I get more information? We know you may have questions that are not addressed in this section. Please feel free to contact us, and we will provide you with all the individual information you need.

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