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AnnuitiesAn annuity is a contract between you and an insurance company, under which you make a lump-sum payment or series of payments. In return, the insurer agrees to make periodic payments to you beginning immediately or at some future date. Annuities typically offer tax-deferred growth of earnings and may include a death benefit that will pay your beneficiary a guaranteed minimum amount, such as your total purchase payments. There are generally two types of annuities—fixed and variable. |
Annuities, FixedIn a fixed annuity, the insurance company guarantees that you will earn a minimum rate of interest during the time that your account is growing. The insurance company also guarantees that the periodic payments will be a guaranteed amount per dollar in your account. These periodic payments may last for a definite period, such as 20 years, or an indefinite period, such as your lifetime or the lifetime of you and your spouse. |
AnnuitantOne who proceeds of an annuity (or upon whose life the payments depend). |
Annuity CertainUnlike an annuity, the annuity certain is a contract which pays for a specific income for a set period of time whether the annuitant lives or dies. |
