What is an annuity?

An annuity is a contract between you and an insurance company that is designed to meet retirement and other long-term financial goals, under which you make a lump-sum payment or series of payments and the insurer agrees to make periodic payments to you beginning immediately or at some future date.

The four major benefits of ownership

  • Principal protection
  • Tax-deferred growth on earnings
  • Death benefit
  • Guaranteed Lifetime Income Riders

Principal Protection – An annuity is an insurance contract, which means your principal cannot be lost due to market volatility1.

Tax-deferred growth – You don’t pay taxes on interest earned in the annuity until the money is withdrawn.

Death benefit – Upon death, a properly structured annuity would be paid to the beneficiary without going through probate court.

Guaranteed income stream – Many retirees use annuities to supplement their income because they offer a fixed monthly payment that can be guaranteed for a certain period or for life.

1Your principal is guaranteed not to be reduced because of a downturn in the applicable market index. However, withdrawals more than the Free withdrawal amount are subject to withdrawal Charges during the Withdrawal Charge period and may result in a loss of principal.

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