Annuities

An annuity is an insurance product that provides a steady guranteed monthly income for life with or without cash back after death. It is usually used as part of a retirement income strategy. If you are a boomer (born 1946-1964) about to retire or already retired, you should consider including an annuities product as a part of your retirement income plan. In this time of financial uncertainty, all nest egg should contain some annuities to ensure a steady and quaranteed income for life. In fact, the "Unretired" as depicted in the BusinessWeek article (12/15/08) would be able to avoid their current plight if they had fixed annuity with quaranteed life income.

• You cannot outlive your savings.
• Protection from investment losses due to market conditions.
• Provides more income than other safe investments like bank CD's.
• Part of each Annuity payment is income tax-free.
• A Refund Annuity with cash back can reduce estate taxes and probate costs.
• A diversified retirement plan with annuities ensures the preservation of your lifestyle and your standard of living!

How does an annuity work?
Here's how an annuity works: you make a lump sum investment in the annuity, and it then makes payments to you on a future date or a series of dates. You may view annuity as the opposite of a life insurance - instead of paying a series of premiums into a life insurance policy and when you die your beneficiary gets a lump sum, annuity pays you over time when you put in a lump sum in the beginning. In fact, annuity is the "real" life insurance i.e, insurance for the living. Basically, traditional life insurance policy pays out in the event of your death whereas annuity pays you incomes when you are alive!

The incomes you receive from an annuity can be paid out monthly, quarterly or annually. The size of your payments are determined by a variety of factors, including the length of your payment period, the size of your investment, your gender and whether you want to have money left over after your death for someone you love or for charity.

I am in poor health, is an annuity right for me?
This would depend on the type of annuities you choose. You can consider annuities with medical underwriting that would mean either you pay a lower annuity premium or receive higher monthly income payments. Putting it another way, no one should rule out annuity simply because of their health situation. A good annuity professional should be able to customize a product to suit your specific needs.

What about inflation?
There are annuities offering inflation protection. In fact, there are many different annuity options available to meet diverse needs and requirements. The truth is if you can imagine the scenario, there is a good chance there is an annutity product out there specifically for it. This is the power of annuity products today - flexibility while guranteeing income for life.


Can I roll over my 401k or IRA into an annuity tax-free?
You can roll over your IRA, 401(k) or lump sum pension payment into annuities tax-free. Annuities funded with an IRA or 401(k) rollover are “qualified” plans, enabling an insurance company to create an “IRA annuity,” into which you can deposit your retirement funds directly. You can also have your employer roll over your 401(k) funds into an annuity without withholding any taxes.


Is my money safe?
In general, your money is safer in annuities than in any other investments. The only risk is if your insurance company would fail. This is why we only deal with companies with at least "A" or above in AM Best rating i.e, rated Excellet or Superior in their financial strengths. Historically, no life insurance companies with "A" or above rating have ever failed.

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