What's an annuity?

Annuities come in many shapes and sizes geared toward consumers looking for growth, protection, income, or a combination of these. At its most basic level, an annuity is an agreement where you pay a premium or premiums and the insurance company pays you a stream of income now or in the future, depending on the payout options available on the annuity you select. But annuities can be so much more than that.

Annuities offer various features depending on the type you select:

• Give you opportunities to grow your money tax-deferred¹
• Provide an income stream including the option for one that you can’t outlive
• Protect your assets from market fluctuations (fixed and indexed annuities only)
• Provide a guaranteed interest rate for a period of time²
• Provide a death benefit for your beneficiaries
  
   

What’s your retirement need? An annuity could help you.

There are various types of annuities that can give you the benefits offered above:

• Fixed annuities – guaranteed fixed rate of return²
• Index annuities – offer interest crediting strategies that are linked to participation in the increase, if any, of an index or benchmark with downside protection; living benefits may provide additional guarantees for an additional cost
• Variable annuities – invest in variable investment options with unlimited upside potential and downside risk; living and death benefits may be available to provide guarantees for an added cost
• Income annuities – immediate or deferred stream of income guaranteed for life²

Other considerations

In addition to the basic payout options, an annuity could offer you additional options to add on to your contract, called riders. These are for an extra fee, of course. Some of the common ones offered are:

• Guaranteed withdrawal benefit – usually a guaranteed lifetime withdrawal benefit or a guaranteed minimum withdrawal benefit.
• Long term care
• Disability or terminal illness
• Death benefit or return of premium
• Guaranteed minimum accumulation benefit or minimum income benefit
• Cost of living adjustments

The annuity market is growing and changing to meet the evolving needs of consumers in a variety of retirement planning stages. Depending on where you are in your journey and your needs and goals — accumulation, lifetime income, protection — one or more types of annuities could be a good fit in your overall retirement plan.
 

¹ IRAs and other qualified plans already provide tax-deferral like that provided by an annuity. Additional features and benefits, such as contract guarantees, death benefits and the ability to receive a lifetime income are contained within the annuity for a cost. Please be sure the features and costs of the annuity are right for you when considering the purchase of the annuity.

² Guarantees are based on the claims-paying ability of the issuing company.