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An annuity is a contract in which an insurance company makes a series of income payments at regular intervals in return for a premium or premiums you have paid to the insurance company. Annuities are often purchased for future retirement income.
Annuitization results from your election to receive regular income payments from your contract. Once you choose to annuitize your contract, that decision cannot be changed. If you elect to annuitize your contract, you will no longer be able to change the terms of the payments to you. You will no longer have access to money that you have paid to the insurance company outside of the payment plan that you elected.
Single Premium - An annuity where you pay the insurance company only one premium payment.
Flexible Premium - An annuity where you pay multiple premium payments to the insurance company.
Immediate - An annuity where income payments to you start immediately, but no later than one year after you pay the premium.
Deferred - An annuity where income payments are not scheduled to start for several years after you pay the premium.
Fixed - An annuity where your money, less any applicable charges, earns interest at rates set by the insurance company or in a way specified in the annuity contract.
Variable - An annuity where the insurance company invests your money, less any applicable charges, into a separate account based upon the risk you want to take. The money can be invested in stocks, bonds or other investments. You may direct allocations of your money into separate accounts. If the fund does not do well, you may lose some or all of your investment.
Equity Indexed - A variation of a fixed annuity where the interest rate is based on an outside index, such as a stock market index. The annuity pays a base return, but it may be higher if the index goes up.
Some designations, such as CSA (Certified Senior Advisor), require no experience. The requirements needed to obtain a designation or certification vary from having to attend a three-day seminar, and pass a multiple-choice exam [CSA or Certified Senior Advisor], to a designation that is recognized industry-wide and has been certified for undergraduate and graduate degrees [CPCU or Chartered Property Casualty Underwriter].
What is the guaranteed minimum interest rate?
What charges, if any, are deducted from my premium & when?
What charges, if any, are deducted from my contract value & when?
What are the surrender charges or penalties if I want to end my contract early and take out all of my money?
For how many years will surrender charges apply?
Can I get a partial withdrawal without paying charges or losing earned interest? Does my contract have vesting?
Does my annuity waive withdrawal charges if I am confined to a nursing home or diagnosed with a terminal illness?
What annuity income payment options do I have and when?
What are the terms of the death benefit?
What are the risks that my annuity/earned interest could decline in value?
Is interest compounded during the term of the policy?
What is your commission on this product?
What is the participation rate?
For how long is the participation rate guaranteed?
Is there a minimum participation rate?
Does my contract have a cap on interest earned?
Is averaging used? How does it work?
Is there a margin, spread, or administrative fee? Is that in addition to or instead of a participation rate?
Which indexing method is used in my contract?
What is the minimum interest the contract can earn?
What is the maximum (cap) interest the contract can earn?