Single Premium Immediate Annuities |
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What is a Single Premium
Immediate Annuity?
A Single Premium Immediate
Annuity is a contract between you and an insurance comapny. By paying in a
lump sum of money you are guaranteed to receive a series of payments over
a period of time. The amount of the payment is determined by both the
current interest rate at the time your contract is issued and by choices
you make from a wide variety of payment options. Once your contract is
issued, your payments are fully guaranteed for the period of time you have
chosen.
Tax-Favored Income?
If you use Non-Qualified funds to purchase a single premium immediate annuity,
the income payments you receive are only partially taxable. The
non-taxable portion of each payment is a level percentage that represents
the return of principal over the life of the contract. Depending on your
age and the payment option you chose, this percentage will vary. If you
are useing Qualified funds (IRA, TSA, 401k money for example) to
purchase your Single Premium Immediate Annuity, the payments you receive
are generally fully taxable as you receive them because they represent
funds that have not beeen taxed before.
No Investment Risk
Once your contract is issued, you can count on your payments no to change
in amount or frequency. You will enjoy the financial security of a
guaranteed income with no investment rusk, Economic conditions or
investment returns may change, but your payment is guaranteed to remain
the same.
A Single Premium Immediate Annuity offers a variety of options so you may
taylor your income schedule to suit your needs. You can chose to receive
payments, monthly, quarterly, semiannually or annually. The payment
options inculude:
- Period Certain Only
"Period Certain" means a number of years you chose. Payments will continue
for the duration of the number of years you chose, and then cease. If you
should die before the end of the stated number of years, your beneficiary
would continue to receive the payments for the remainder of those
years.
- Life Only
Payments will continue for the rest of your life. You cannot outlive your
income. Upon your death, payments stop.
- Life and Period
Certain
Life and period certain means payments will continue for the rest of your
life, but for no less than the stated number of years. If you should die
before the end of the stated number of years, your beneficiary would
continue to receive the payments for the remainder of those years.
- Life Only with
Guaranteed Minimum Option
Payments will continue for the rest of your life. If you should die before
you have been repaid your inital investment, the balance of your inital
investment will be paid in like installments to your beneficiary.
- Joint and
Survivor
Payments are guaranteed
during the lifetime of two people. After the death of one, payments
continue for the lifetime of the surviving person. You can chose to have
either full payments, or a percentage you chose, to continue for the
lifetime of the survivor. You can also specify a period certain, and if
both individuals were to die withing the period certain, payments would
continue to the named beneficiary for the emainder of the period
certain.
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