Knowing the kind of annuity most beneficial to you is key to a prosperous life. It’s not a one size fits all situation. There are way too many types of annuities and it is normal to be confused. We will help you find a compatible annuity plan. We offer both, immediate annuity plans for urgent income needs and deferred annuity.
plans so you can get the benefits of tax-deferred growth. We also offer fixed and variable annuities depending on your appetite for risk or stability.
It is important to understand different types of annuities and how to combine them to fit your investment profile. Don’t go in blind. Look into these categories before investing. The basic categories of annuity plans are the simplest levels of annuity type. There can be more types of annuity plans by combining these basic types. There are four basic types of annuities based on investment plan type and payout plan type.
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leo.
- Fixed Annuity: When you invest a fixed amount of money into your annuity plan for a predetermined number of iterations at a fixed interval, for a predefined amount of return. People go for this when they want a simple plan with stability.
- Variable Annuity: When the amount of investment varies according your investment portfolio. The return also varies according to the amount of investment. People go for this when they want to make the most of the market trends and have a higher risk appetite.
- Immediate Annuity: This is the kind where the investment starts giving you returns immediately. People go for this when they need payments immediately or when they don’t mind the capital not growing to its maximum potential.
- Deferred Annuity: If you want the principal amount invested to grow before you start withdrawing the returns, this is what you are looking for. If you don’t need immediate returns it is recommended you go for deferred plans.
These basic categories are explained further below so that you have a clear idea about the kind of investment you want to make and the mode of payment you need to sign up for.
A fixed annuity gives the policyholder a fixed income at a fixed interval. This is the simplest type out of all annuity plans that exist. The policyholder can make a one-time payment or interval payment for this plan. You will start receiving your income after the money you pay grows at a fixed rate over the accumulation phase.
Variable annuity plans allow investors to play the field by choosing their assets. Your income will vary according to the performance of the assets you picked to invest in. If the sub-accounts invested in succeed, you gain. But if the value of the sub-accounts fall, you stand to lose. With an investment agency dedicated to its clients, your variable annuity portfolio will comprise the most promising sub-accounts to minimize chances of losing the money.
With an immediate annuity plan investors start receiving their interest from the very next iteration after the first investment. Immediate annuities are single-premium plans. You invest a lump sum and get an interest on it starting almost immediately after.
Investors have the option to wait to let their principal amount grow before they start withdrawing the interest. This is a wise way to make maximum benefits of the performance of your assets. This is why deferred annuity is the most popular type of variable annuity.
You can talk to your financial advisor about your risk appetite, capital, and payout needs to figure out what suits you best. All these basic types of annuities can be mixed and matched to make the hybrid most suited for you.
If you need some money immediately for some added expenditures which were not factored in earlier, you can go for an immediate annuity plan. It is also called an income annuity because it acts as a second income for the added expenditures. This plan is good for people looking for an immediate income flow. It is recommended for short-term plans or if the principal value is high enough to sustain the number of interest iterations required.
This is the best plan for those who want to let their capital grow steadily for a prosperous future. If you don’t want to take risks or deep dive into market index trends, you can live in peace with a fixed annuity plan. With a fixed deferred annuity plan you will be making sure that the principal amount grows long enough to give you a rich interest. You can choose how much you want to invest and also how long you want to defer. This option is the best plan to go for if slow and steady is your investment principle.
This is the most popular plan because it is the most beneficial to let the principal amount grow before you start withdrawing so that you get a larger interest. If you have the time to let your money sit and grow it is the only reasonable option. The benefits of fixed index annuity are already known. It is the perfect balance between stability and opportunity optimization.
This option is chosen by clients with the maximum capital to invest. If you have assets you won’t need to use in the near future and a knack for calculated risks, this is the plan that will give you the best return on investment. Variable annuity can be risky but with our expert financial advisors, you will be making the best bets.
Fixed annuity and fixed index annuity are the most popular kinds of annuities in the current market. An index annuity pays interest according to a current market index. Hence, a fixed index annuity offers market rate based annuities but with a fixed cap. It is a hybrid of fixed and variable annuity plans. While some might say this is better than fixed annuity, you need to decide for yourself.
Confusion arises when people use these two terms interchangeably. As an investor who knows the difference you are well-equipped to make the correct choice for yourself. A fixed annuity plan is simple, steady, and hassle-free. It is best for investors who want security and peace with a steady income. A fixed index annuity plan offers diversification opportunities and room for higher gains. This is best for investors with a higher risk appetite.
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leo.
With a fixed annuity plan, your income is fixed on an interest rate for a fixed number of iterations. You can renew the annuity or exchange it without any tax penalty after the fixed time. With a fixed index annuity, you get a minimum fixed interest rate and extra returns based on the performance of the portfolio. Unlike in a fixed annuity plan, there is a considerable surrender charge for this plan. Usually, the gains are higher in the fixed indexed annuity plan but the calculations are more complex. It is nothing too complicated but investors need to take some time to understand the calculations before investing so that they can compare the performance of the two plans for a specified principal value.
The risk is still calculated and limited because your investment is not in the direct line of fire of the stock market. You are covered with a diversified portfolio. Our top-notch financial advisors ensure that our investments are diversified across the most robust sectors. Therefore, not only our fixed annuity plans, but also our immediate annuity policies as well as our annuity life insurance policies see maximum benefits for the lowest risk possible at any given time.
Note: These annuities have capped profit margins to offer protection against market deficits. Hence, while you might not gain as much as the companies invested in gain in profits, your investments will never go under if the company goes under.