Annuities (SEC) - An annuity is a contract between you and an insurance company, under which you make a lump-sum payment or series of payments. In return, the insurer agrees to make periodic payments to you beginning immediately or at some future date. Annuities typically offer tax-deferred growth of earnings and may include a death benefit that will pay your beneficiary a guaranteed minimum amount, such as your total purchase payments. Also see Variable Annuties and Variable Annuities: What You Should Know.
Annuity Advantage -
Independent no-load annuity marketplace. Provides one stop shopping for annuity rates and annuity quotes needs, as well as the tools and information to learn about, compare and buy CD-Type Annuities, Fixed Annuities, Equity-Indexed Annuities and Immediate Annuities.
Annuity Basics -
Information on buring and selling annuities.
There are generally two types of annuities—fixed and variable. In a fixed annuity, the insurance company guarantees that you will earn a minimum rate of interest during the time that your account is growing. The insurance company also guarantees that the periodic payments will be a guaranteed amount per dollar in your account. These periodic payments may last for a definite period, such as 20 years, or an indefinite period, such as your lifetime or the lifetime of you and your spouse.
Annuity Quick Quote -
A variable annuity life insurance company that offers clients a range of investment options. Dedicated to providing pre-retirees, retirees and corporations with immediate annuity and income planning solutions that offer a steady stream of guaranteed retirement income that investors can’t outlive.
Annuity (Wikipedia) - U.S. Financial Products: In the U.S. an annuity contract is created when an individual gives a life insurance company money which may grow on a tax-deferred basis and then can be distributed back to the owner in several ways. The defining characteristic of all annuity contracts is the option for a guaranteed distribution of income until the death of the person or persons named in the contract. Perhaps confusingly, the majority of modern annuity customers use annuities only to accumulate funds and to take lump-sum withdrawals without using the guaranteed-income-for-life feature.
Downside of Market-Proof Annuities (BusinessWeek, Anne Tergesen) - "The sales pitch sounds great, especially given the stock market's recent woes: Invest in stocks using a popular retirement savings vehicle and, for an extra layer of fees, you'll get protection from market declines and a guaranteed pension-like income for life. And you won't give up the ability to profit when stocks recover. With baby boomers nearing retirement and corporations scaling back defined-benefit pension plans, the insurance industry is adding guarantees called living benefits to the plain old variable annuity. The over-50 set is snapping them up. Since 2005, VA sales have risen 18%, after stagnating earlier this decade. "Living benefits have been the primary driver," says Michael DeGeorge, general counsel at the National Association for Variable Annuities (NAVA). Insurers say more than 80% of VA contracts now offer the new breed of benefit. But there are serious downsides to these benefits. The fees can raise the already high cost of VAs to over 3% of assets per year. And the fine print in many of the contracts may reduce the value of the guarantees. Moreover, there are cheaper ways to get similar results."
Edward Jones -
An annuity is an insurance policy sold by an insurance company designed to provide an income, usually after retirement, that cannot be outlived. An annuity contract has two phases: an accumulation phase and a payout phase. During the accumulation phase, the contract owner makes a payment or payments into the contract in exchange for either a fixed or variable return that is not subject to income taxes until withdrawal, permitting the tax deferred growth of your investment. During the payout phase, the accumulated value of the annuity contract can be converted into an income stream that can last for a set period of time or for as long as one lives. An annuity contract can also be purchased that immediately pays an income stream. This type of contract is called an immediate annuity.
Hartford Leaders Variable Annuity with Lifetime Income Builder Portfolios Single Life Option -
Guaranteed 5% return, more if market rises. Hold for 7 years, then can withdraw all at surrender value without penalty. You may not want to do this if market has gone down and surrender value is less than originating account value. But you are guaranteed minimum of 5% for life, more if market improves, and step up at age 65 [5.5%], 70 [6%], 75 [6.5%], etc. Initial investment could decline,in which case may not want to withdraw funds. But you would still get 5% of original investment even in worst of circumstances -- unless company went under.
How to Calculate the Rate of Return of an Immediate Annuity - To compare the purchase of an immediate annuity to other investment options, you must calculate the rate of return of the annuity. This is more difficult than it sounds as the rate of return that an immediate annuity delivers depends entirely upon your life expectancy.
Immediate Annuities -
Instant annuity quote calculator.
Enter your state, age, and gender, then either a desired income payment or fixed investment amount. For a joint life annuity, you have the option of entering your spouse’s age and gender. The output includes data for 11 different types of fixed and life annuities.
In the Market for Variable Annuities: An Advisor Focus - As they take stock of their fi nances in the wake of last year’s market crash, clients are peppering their advisors with questions such as: “How do I protect the money I have left? How do I rebuild my portfolio? Can I afford to retire?” As part of their answer, some advisors are suggesting variable annuity contracts. No longer just tax-deferred savings vehicles, today’s variable annuities offer riders that promise upside potential, downside protection and income for life, all in one package. But many advisors have lingering concerns about variable annuities, including the fi nancial strength of the companies offering them, their complexity and their costs. Sponsored by Prudential, a panel of industry experts convening in New York discuss these issues.
John Hancock: Annuties -
An annuity is a financial product issued by an insurance company. It allows tax-deferred growth of assets. At retirement, an annuity can help to provide a guaranteed income stream for one or more people, in specified amounts, for a specified period or for life.
Life Annuity - A life annuity is a financial contract in the form of an insurance product according to which a seller (issuer)—typically a financial institution such as a life insurance company—makes a series of payments in the future to the buyer (annuitant) in exchange for the immediate payment of a lumpsum (single-payment annuity) or a series of regular payments (regular-payment annuity), prior to the onset of the annuity. The payment stream from the issuer to the annuitant has an unknown duration based principally upon the date of death of the annuitant. At this point the contract will terminate unless there are other annuitants or beneficiaries in the contract, and the remainder of the fund accumulated is forfeited. Thus a life annuity is a form of longevity insurance, where the uncertainty of an individual's lifespan is transferred from the individual to the insurer, which reduces its own uncertainty by pooling many clients. Annuities can be purchased to provide an income during retirement, or originate from a structured settlement of a personal injury lawsuit.
Lincoln Smart Income Inflation Annuity -
Lifetime income payments that help keep pace with inflation. A death benefit (within contract provisions).
A reserve value that provides flexibility.
MassMutual: Annuities -
If you need a tax-deferred investment to provide guaranteed income for life or a specified number of years in the future, an annuity may be worth considering.
MetLife Deferred Annuities -
A deferred annuity is a type of personal account intended for long-term savings goals, like retirement. Unlike an immediate annuity, income payments are optional and are deferred until a future time. Deferred annuities have two phases: the savings and investment phase, where your earnings accumulate tax-deferred, and the income phase, where you can receive regular payments for your lifetime or another period. Deferred annuities typically allow withdrawals during the savings and investment (or accumulation) phase, and entering into the income phase is typically optional. Early withdrawal charges and ordinary income taxes apply at withdrawal, and tax penalties for withdrawals before age 59 1/2 may apply. There are two types of deferred annuity: fixed and variable.
Nationwide: Best of America All American Gold Annuity - With a Nationwide Lifetime Income rider you are guaranteed growth, up to 100% (you are guaranteed that your income benefit base will increase by 10% simple interest annually for 10 years, or until you take your first withdrawal, whichever is sooner; if you don't take withdrawals for 10 years, this is a guaranteed 100% increase)
New York Life: Annuities - New York Life Annuities are issued by New York Life Insurance and Annuity Corporation, a stable and secure company dedicated to helping clients achieve financial security.
New York Life Lifetime Income Annuity -
The New York Life Lifetime Income Annuity is a single premium immediate income annuity that provides a stream of guaranteed income payments for the life or joint lives of the annuitant(s). It is an irrevocable contract in which NYLIAC promises to make income payments to you for as long as you live.
Prudential Annuities -
There are four basic types of annuities. The best one for you depends on your individual needs:
Fixed Annuities - For more conservative investors, a safe and steady way to grow assets at a fixed rate of interest with a tax deferral.
Immediate Income Annuities - Make one purchase payment and begin receiving annuity payments soon after. You choose the payout period, including a lifetime income.
Modified Guaranteed Annuities - Provide tax-deferred earnings with long-term fixed-rate options. Also known as Market Value Adjustment (MVA) annuities.
Variable Annuities - Plan for retirement with a wide range of investment options, professional portfolio management, tax deferral, income options, and death benefits. Variable annuities have the potential to keep up with and even outpace inflation.
Single Premium Immediate Annuity (SPIA) -
Information on SPIA, quotes and calculator: A popular approach to money management in the current financial environment is an investment known as the single premium immediate annuity, or SPIA. Its premise is simple. You turn over a lump sum of cash to an insurance company; in return you start receiving a fixed monthly payment. It begins immediately and continues as long as you live, even if you live to 110. This type of arrangement is ideal if you are concerned about outliving your assets, don't enjoy dealing with the volatility of the stock market and don't want to have to make any investment decisions.
Despite their appeal as a safe haven, you should never put all your money into an immediate annuity, partly because you want to have some liquid assets available for an emergency and partly because they may not be indexed to inflation (unless you pay extra). One rule of thumb is to put no more than 30 percent to 35 percent of your assets in these investments.
SPIA.com - Immediate Annuities have five basic product groups. Within these groups are many more guarantee options. Find the category that fits your situation best.
Vanguard Life Annuity Calculator - Use this calculator to see what your monthly income payment would be if you purchased an annuity with a specific amount—$100,000, for instance—today. Or you can see how much you would have to invest in order to receive the monthly income payment that you want. You can enter a little or a lot of information depending on what you are looking for. It also gives you an immediate premium or payout quote which presumably is accurate for its own products. The different payout options are helpful if you don’t want an annuity that pays lifetime income.
Variable Annuity Pros and Cons: What's all the Chatter About? - Excellent article comparing annuities to mutual fund investments. "As with most concepts that sound too good to be true, annuities have their flaws. They are often criticized for being expensive, not always justifying their costs, and being too heavily marketed. I don’t take a hard stance in favor or against the variable annuity as an investment product. I think for some people it’s a great option, and for others (generally those with a solid background in investing) it’s probably not the best choice..."
What Is a Guaranteed Rate Really Worth? - By Moshe A. Milevsky, PhD: "Most of the promotional material touting 'guaranteed lifetime income benefit' variable annuity (GLiB VA) products is very careful to emphasize that these guarantees — of 5, 6 or 7 percent — are applied to an income base and not to the account value, which fluctuates over time. However, I can attest that few people understand how to calculate the implied return on these products and convert it into a number comparable to interest in a bank account or investment returns on a mutual fund. Instead, the marketing material speaks the language of 'investment Celsius' to human beings who are hard-wired to understand 'economic Fahrenheit.'" Also use the Cash-Equivalent Yield of Guaranteed Lifetime Income Benefit (GLIB) Calculator.
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Wednesday, May 2, 2012 7:58 PM
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Cash-Equivalent Yield of Guaranteed Lifetime Income Benefit (GLIB) Calculator - The "Guaranteed" rates on a Guaranteed Lifetime Income Benefit (GLIB) can be confusing. This calculator evaluates how much GLIB "Guarantees" are really worth.
