Frequently Asked Questions what is an annuity?

Generally speaking, an annuity is simply an agreement for one person or organization to pay another a series of payments. If you die before all guaranteed payments have been made, any remaining amount will be paid to your beneficiary according to the terms of your settlement option.

1. When can I begin getting payments from my annuity? You can begin collecting payments at age 59 ½, but there is some flexibility built in for those who need to make withdrawals earlier. Beginning with the second year of the contract, you can withdraw up to 10 % of the accumulated value at the end of the previous year without surrender charges being assessed. In some states, a partial withdrawal fee may apply. Keep in mind, a 10 % federal income tax penalty may be imposed on any withdrawal before age 59 ½. In addition, you have to report interest income on your tax return for the taxable portion of any withdrawal.

2.You may have other withdrawal options prior to age 59 ½ and some limitations or penalties may apply. .

     3.   How long will my annuity pay out?

 You can choose to receive a guaranteed income for as  long   as you live, or you could opt for larger payments for a shorter length of time. Annuity payments can be made monthly, quarterly, semi-annually or annually. The dollar amount of your payment depends on the balance in your contract, the settlement option you select and your age when you begin the settlement.

    4. What are the tax benefits of an annuity?

Your annuity’s earnings buildup is not taxed until a withdrawal is made. Also, a fixed portion of each payout from a non-qualified annuity is excluded from taxable income. That portion of the payment is considered to be a return of your capital. 

     5. What is the minimum amount I need to start an annuity?

Fixed flexible premium annuities require a minimum investment of $50. Variable annuities require a $1000 minimum investment. After that, there is a minimum periodic payment of $50. The minimum investment needed for a single premium deferred annuity is $10,000.

The investment objectives, risks, charges and expenses of the variable annuity investment options must be considered carefully before investing.  Read the Variable Annuity prospectus carefully before you invest or pay money.

      6. Do annuities have a guaranteed interest rate?

Yes, some do. The Flexible Premium Deferred, Single Premium Deferred and Single Premium Immediate annuities  have a guaranteed interest 

The information contained here is general and should not be considered legal or tax advice. Laws of a particular state and your particular situation may significantly affect the general information presented herein. The availability of the tax or other benefits mentioned above may be conditioned on meeting certain requirements. You should consult your attorney or tax advisor regarding your specific legal or tax situation.You should carefully consider investment objectives, risks and charges and expenses of  annuities and their underlying funds before investing,