The annuity, in essence, is insurance against "living too long." In contrast, traditional life insurance guards against "dying too soon." Here is a summary of how annuities function. An investor hands over funds to an insurance company. The insurer invests the funds. At the end of the annuity’s term, the insurer pays the investor his or her investment plus the earnings. See similar questions...

Variable annuity contracts are sold by insurance companies. Purchasers pay a premium of, for example, $10,000 for a single payment variable annuity or $50 a month for a periodic payment variable annuity. The insurance company deposits these premiums in an account which is invested in a portfolio of securities. The value of the portfolio goes up or down as the prices of its securities rise or fall. See similar questions...

One negative aspect of an annuity is that you cannot get to your money during the growth period without incurring taxes and penalties. The tax code imposes a 10% premature withdrawal penalty on money taken out of a tax-deferred annuity before age 59-1/2, and insurers impose penalties on withdrawals made before the term of the annuity is up. The insurers’ penalties are termed "surrender charges," and they usually apply for the first seven years of the annuity contract. See similar questions...

Annuities are a savings or investment account with a life insurance company. Dave's ELPs are specialists in this area: http://www.daveramsey.com/sa/mutualfunds/ See similar questions...

Contact your state insurance department or you can go to the Articles Section and link to the Index Annuity Buyers Guide, which is prepared by the National Association of Insurance Commissioners. See similar questions...

Yes. Annuities aren't for everyone. Annuities have surrender charges that can be imposed on withdrawals in excess of the "Free withdrawal" amount. In addition, you may be subject to IRS early withdrawal penalties if taking withdrawals prior to age 59 1/2. Finally, equity index annuities may be limited by the products caps, performance rates, account expense charges and strategies. See similar questions...

No. Index annuities have differing penalties for early withdrawal, may offer different indices, and one index annuity probably calculates index gain, and credits interest, a little differently from another. See similar questions...

Most fixed annuities are sold as back-end loaded contracts, meaning no fees are assessed at the time of this product's purchase. The insurer makes its money ? on the "spread" between the interest it earns on invested premiums and the amount that it credits to an annuity. During the accumulation period, interest credited or earned on an annuity is not currently taxable to the contract holder. As long as the funds remain in the annuity, they preserve their tax ? deferred status. See similar questions...

A fixed interest rate is set at the time of purchase for 30% (33% in WA) of the account value. This fixed interest rate is calculated and credited daily. The portion of the account value linked to the S&P 500 Index, 70% (67% in WA), will be credited on the last day of the contract year if there is an increase in the S&P 500. No, an annuity contract is the sole property of the contract owner, and all ownership rights rest with the owner. See similar questions...

You pay NO taxes while your money is compounding. You can also pay a lower tax on random withdrawals because you control the tax year in which the withdrawals are made, and only pay taxes on the interest withdrawn. See similar questions...

Not in the same way that a variable annuity or mutual fund does, but more like the way a bank does it. Index annuities have penalties for early withdrawal if you surrender the annuity early. You need to match the period with your goals, keeping in mind that all annuities are designed to be long-term savings instruments. This is where your AMS Business Consultant will help you decide which product is right for your client's situation. See similar questions...

Index annuities are designed to provide a return somewhere between stock market vehicles and savings instruments - somewhere between mutual funds and CDs. Because interest is linked to movements of an index there could be periods when the index annuity credits double digit interest rates and years when zero is credited. But index annuities were created with the intention of providing the realistic potential for higher interest rates than other instruments that protect principal from market risk. See similar questions...

There are two basic types of annuities: fixed or variable. In a fixed annuity, your cash value earns a fixed interest rate. Additionally, you are guaranteed a fixed payment when you begin to receive your annuity income. Guarantees are backed by the claims-paying abilty of the issuing insurance company. Variable annuities provide a variable rate of return, which will fluctuate up and down depending on the performance of the investment portfolio you select. See similar questions...

To qualify for the Annuity Purchase Program, the annuity must possess a non-qualified tax status and not be a variable annuity. See similar questions...

Yes. Transferable single premium immediate annuities with fixed payments and fully-paid deferred annuities with fixed payments in the payout phase are ideal. However, through the J.G. Wentworth Annuity Purchase Program??? you can also provide your clients liquidity for annuities with a death benefit, deferred annuities that are past their accumulation phase and equity indexed annuities. You can even provide options to your clients for partial payments. See similar questions...

To reduce the complexity of the options and annuity structure to meet the needs of our members and participants. See similar questions...