Frequently Asked Questions

An annuity is a financial product designed to provide a steady income stream during retirement. It is typically purchased from an insurance company. 

An individual invests a lump sum or makes regular payments into an annuity. The annuity then grows over time, and at a predetermined date, the individual starts receiving regular income payments from the annuity.

There are several types of annuities, including fixed annuities, variable annuities, indexed annuities, immediate annuities, and deferred annuities. Each type has its own features and benefits.

Annuities offer a guaranteed income stream during retirement, protection against market volatility, and tax-deferred growth. They can also provide a death benefit for beneficiaries.

Annuities often have fees and charges, including surrender charges for early withdrawals. They may also have limitations on access to the invested funds and potential reduced returns compared to other investments.

Yes, you can typically choose between lifetime income options, fixed-period payouts, or a combination of both. It's important to select the payment option that aligns with your financial goals.

Depending on the type of annuity, they may have some level of insurance. Fixed annuities are typically backed by the issuing insurance company. However, variable annuities are not insured and are subject to market risk.

Annuities are tax-deferred, meaning you don't pay taxes on the growth until you start receiving withdrawals or income payments. When funds are withdrawn, they are taxed as ordinary income.

Yes, you can surrender your annuity, but surrender charges may apply, especially if you cancel the annuity within a certain period, typically known as the surrender period. It's important to review and understand the surrender terms before purchasing an annuity.

Annuities are not suitable for everyone. They are most beneficial for individuals seeking a guaranteed income stream during retirement and willing to trade liquidity and potential higher returns for stability and security. It's essential to consult with a financial advisor to determine if an annuity aligns with your specific financial goals and risk tolerance.

Please note that this information is general in nature and does not constitute financial advice. It's always recommended to consult with a financial professional before making any investment decisions.