Deferred CD Type Annuities

A traditional CD-type fixed annuity guarantee a return of the principle. There are two main phases:

  1. Savings Phase - where you invest money into the account.
  2. Income Phase - where the plan is converted into an annuity and payments are received.

Your interest rate is locked in for a period of time you select, and at the end of the surrender period, there are no fees of any kind. All CD-type fixed annuities compound tax-deferred and then can be converted to lifetime income at a later date.

With all CD-type fixed annuities, you never have to elect the income phase. After the surrender period is completed, the owner can select a new rate period, transfer to any other investment outside the insurance company or do a 1035 IRS transfer to another annuity at a higher rate.

Annuitization is never required and only an option.

Single Premium Immediate Annuities

Also known as SPIAs, an immediate annuity allows you to make a single premium payment, and begin receiving a monthly income for the rest of your life or a certain number of years. This type of plan is purchased with a single deposit amount. You can choose to receive money on a monthly, quarterly, semi-annual or annual basis. Your money is backed by the insurer and is not based on the fluctuations of financial markets. SPIAs guarantee a regular income for the rest of your life.

Single premium immediate annuities offer many different options at time of purchase:

  • The owner can opt for single or joint lifetime income.
  • To protect beneficiaries, a period certain for 10,15 or 20 years can be added to lifetime income to protect against early passing of the annuitants.
  • To maximize monthly income, a reduction of 50, 60 or 70 percent to the second annuitant can be selected upon the passing of the first annuitant.

In addition, riders can be added to hedge for inflation.

Fixed Index Annuities

A fixed index annuity, also referred to as an equity index annuity, provides you with the best features of a traditional fixed annuity: a guarantee of principal.

The only fixed index annuity we recommend is Lincoln New Directions for one most significant reason, Lincoln will automatically credit the owner the full maximum rate when the S & P 500 is zero or positive. All carriers except Lincoln will credit the full interest rate only when the S & P 500 goes up to the maximum. This can make a huge difference in extra income over time. Upfront bonuses and income rider guarantees are often being misrepresented and need to be very carefully reviewed. It is our professional opinion that both should be avoided.