Annuities

Question 1

Annuity

Answer 1

An annuity is a retirement plan, not life insurance, used to liquidate an estate. Prevents the risk of outliving your money and earnings grow tax-deferred

Question 2

Owner, annuitannt, and beneficiary

Answer 2

Owner - purchases the annuity contract and pays the premium

Annuitant - receives the payments which are based on the amount, age, and gender

Beneficiary - receives cash value or premiums, whichever is higher, if the annuitant dies during the accumulation phase. Interest is taxable

Question 3

Accumulation Period

Answer 3

• Pay in period
• building your estate
• Grows tax - deferres
• money belongs to the policy owner 

Question 4

Annuity Period

Answer 4

• Pay out period
• money belongs to the company
• policy owner gets the payout

Question 5

How are premiums paid?

Answer 5

Single premium - one lump sum

Level premium - same payment frequency

Flexible premiums - periodic or many

Premiums are not tax deductible