Chris Camburn

What Are the Differences Between Qualified and Non-Qualified Annuities?

Qualified Annuities vs. Non-Qualified Annuities Annuities can be used in tax-qualified retirement plans, such as IRAs, pension or profit sharing plans, 401(k) plans, 403(b) plans, and certain governmental plans. These annuities are called qualified annuities and are typically funded with pre-tax dollars. Some qualified annuities are purchased with after-tax dollars for use with Roth accounts, …

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What Do Annuities Cost?

What Do Fixed Annuities Cost? A fixed annuity typically does not impose direct expense charges on the contract owner, other than surrender charges (charges for cancellation of the contract during its early years) for deferred fixed annuities. The spread, or difference between what the issuing company expects to earn and what it commits to pay …

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How Are Annuities Regulated?

In the United States, commercial annuities are issued by insurance companies. When new fixed and variable products are developed, they must be filed with the state’s insurance department. Before these products can be sold, each state where they will be available must provide written approval. Because variable annuities are considered securities as well as insurance …

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What Are the Differences Between Deferred and Immediate Annuities?

Deferred Annuities: A Way to Save Money for Retirement Many people buy annuities because they want their money to grow tax deferred while they are saving for retirement, and they want a guaranteed income stream once they retire. This type of annuity is called a deferred annuity. A deferred annuity contract has two phases—an accumulation …

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What Are Guaranteed Minimum Living Benefits?

Prior to about 1997, principal protection under variable annuity contracts was offered only in the case of death. In 1997 the first Guaranteed Minimum Income benefit was issued, which offered contract holders the opportunity to generate annuity income from the greater of the account value or a guaranteed minimum amount based on the premium, after …

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What Are Guaranteed Minimum Death Benefits?

If a contract owner dies in the accumulation phase, a deferred annuity contract will, at a minimum, pay the accumulation value to a named beneficiary. Sometimes the contract may be continued by the beneficiary, with the beneficiary as the new owner. The contractual payout of this benefit varies by policy and can be payable as …

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How Are Annuities Used in Estate Planning?

A variable annuity, while not designed as an estate planning tool, does offer some benefits in this area. An annuity avoids probate, provides flexibility when passing on assets to heirs, and can potentially increase the likelihood of leaving a larger estate in some circumstances. Variable Annuities Avoid Probate—A variable annuity is a contract between an …

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Should I Buy an Annuity?

Like many products available in life, annuities are not something you have to buy or invest in, but are an attractive option for someone seeking guaranteed investment growth, income, or protection of principal.* There are 3 basic types of annuities: Immediate, Fixed, and Variable. Immediate Annuity – is an annuity purchased with a single premium …

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How Are Variable Annuity Sales Charges Structured?

B-Share Variable Annuities Most variable annuity contracts are B-share products. They are offered with no initial sales charge, but cancellation of the contract during its early years may trigger a withdrawal charge known as a surrender charge. These charges typically range from 5 percent to 7 percent of premium in the first policy year, and …

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