Fixed Indexed Annuity
WHAT IS A TAX-DEFERRED ANNUITY?
A tax-deferred annuity is a contract between you and an insurance company for a guaranteed interest bearing contract. The Company credits interest, and you don’t pay taxes on the earnings until you make a withdrawal or begin receiving an annuity income.
WHAT IS TAX-DEFERRAL?
Tax-deferral means that you are postponing paying taxes on interest earned until a future date. During that “deferral” time you are earning interest on dollars that would otherwise be paid as taxes. Leaving you the potential to accumulate more money over a shorter period of time, which ultimately can provide you with a greater return.
Tax-deferred growth allows your money to grow faster because you earn interest on dollars that would otherwise be paid in taxes. Your premium earns interest, the interest compounds within the contract and the money you would have paid in taxes earns interest. This chart details the potential of a tax-deferred annuity.
ABILITY TO AVOID PROBATE
Passing along the value in your annuity to a named beneficiary can avoid the delays and costs of probate–making for a simplified way to transfer assets during a difficult time.
Annuities can provide you with a guaranteed income stream with the purchase of a tax-deferred annuity. You can convert an annuity into payments based on your needs—whether that be payments for life or over a specified period.
We encourage you to consult with and rely on your legal or tax
advisor to fully understand the tax effects annuities can have for you and your estate.
Fixed Index Annuities are not a direct investment in the stock market. They are long term insurance products with guarantees backed by the issuing company. They provide the potential for interest to be credited based in part on the performance of specific indices, without the risk of loss of premium due to market downturns or fluctuation. They may not be appropriate for all clients.