Main Menu Home Page Secure File Area Refer a Friend Important Links Insurance Glossary Our Locations Employee Directory Contact Us Privacy Policy Health Health Insurance Home Health Insurance Quote Long Term Care Insurance Quote Life Life Insurance Home Life Insurance Quote Term Life Insurance Quote

The Basics Of Annuities Whatever your plans - funding a college education, protecting your loved ones, or anticipating retirement - annuities may help put you on course toward your goals. An annuity is a contract between you and a life insurance company.  How exactly does an annuity work?  You contribute money into an annuity and, in exchange, the company agrees to make a future income stream available to you.  (Depending on the contract and company, annuity contracts may contain charges and penalties that could impact your principal.) The key benefits of annuities are: #1 - an income stream that you cannot outlive #2 - avoid probate  #3 - safety for your principal #4 - tax-deferred growth of funds To read more about The Advantages of Annuity Ownership, click here. Fixed Annuities A fixed annuity gives you the stability of a fixed interest rate that is determined by the insurance company and is guaranteed never to fall below a minimum interest rate.  It is a vehicle that can guarantee a stream of fixed payments over the life of the annuity.  A fixed annuity can be a deferred annuity, for which there is time elapsed between the initial purchase payment and the stream of payments, or an immediate annuity which gives you access to a stream of income immediately after you purchase it.  Also, a fixed annuity can be flexible premium or single premium.  Flexible premium annuities allow for multiple purchase payments, while a single premium annuity requires one lump-sum purchase payment. Variable Annuities A variable annuity is a deferred annuity that allows you to participate in the investment of annuity funds by determining how much of the purchase payment will be invested in a series of subaccounts tied to various financial markets.  Variable annuities can allow for flexible premiums and single premiums. Fixed-Indexed Annuities A fixed-indexed annuity is a variation of a traditional fixed annuity and gives you the opportunity to earn interest at an interest rate that is determined according to a formula based, in part, on the change of a referenced index.  The advantage of a fixed-indexed annuity is that you won't lose your money, regardless of index performance, unless the contract is surrendered during the early withdrawal period.  Plus, your indexed interest locks in each year.  Fixed-indexed annuities can also be flexible or single premium. To receive more information about annuities from your representative with Basic Financial Solutions, Inc., click here. Return to home page.