An annuity is an insurance contract that can be used in financial planning. This product allows you to make a lump-sum payment or a series of payments in return for regular payments immediately or at an established time in the future. Annuities may offer protection against the risk of outliving your savings or other retirement funds. In some cases, they also may protect your assets from creditors.  

Depending on your situation, an annuity might be right for you. Several types of annuities may be available to you, and each has unique features. The team at 800 Insurance can help you understand the different types of annuities and find one that meets your needs. Give us a call today at 415-928-2886 to learn more.  

Types of Annuities 

Annuities can be structured in different ways. Three of the most common types are fixed annuities, variable annuities and indexed annuities. Learn more about each type below: 

Fixed annuity: A fixed annuity provides you with a guaranteed minimum rate of interest on your contributions. It also guarantees the payout amount. Payouts from a fixed annuity may last for your lifetime or for another specified time period. 

Variable annuity: With a variable annuity, the rate of return is connected to the performance of invested funds. Because the money is tied to investments of your choice, the rate of return may vary.  

Indexed annuity: Indexed annuities may also be referred to as equity-indexed annuities or fixed-indexed annuities. This type of annuity provides a guaranteed minimum interest rate, but its value is also affected by the performance of a specific market index. Methods to calculate gains within an indexed annuity may vary. 

Annuity Payouts 

Annuities have different options regarding payouts. An immediate annuity, also called an income annuity, begins payments within a year of purchase. With a deferred annuity, however, you receive payments at a later date (e.g., when you retire).  

The length of time an annuity pays out can also be structured differently. Lifetime annuities provide a stream of income for the remainder of your life, while fixed-period annuities, also called term-certain annuities, provide payouts over an established amount of time.  

How Are Annuities Funded? 

Annuities are funded either by a single payment (a single premium annuity) or a series of payments (a flexible premium annuity). Flexible premium annuities are meant to be invested for a long period before money is paid out from them, while a single premium annuity may provide payouts after it has been invested for a short or a long period time. 

More Information 

Annuities can be a complicated financial product with various structures, rates of return, fees and early withdrawal penalties. The agents at 800 Insurance can review the options with you. For more information, visit their website at www.800-insurance.com.