Understanding Indexed Annuities
What’s an annuity?
Let’s start with the basics. An annuity is an insurance product designed to accumulate tax-deferred money (during what’s called the accumulation phase), with principal that isn’t subject to market volatility.
An annuity is one of the few savings vehicles that can guarantee payments for life (during what’s called the payout phase) and is generally considered a safe option. That’s because annuities offer principal protection, in addition to guaranteed interest accumulation, to help grow money for retirement.
What makes Flexible Premium Bonus Indexed Annuity different?
There are many types of annuities to choose from, but Flexible Premium Bonus Indexed Annuity is unique because it accepts ongoing deposits in one contract for retirement purposes. This allows you to consolidate your money and retirement accounts in one policy rather than buying multiple policies.
Here’s how Flexible Premium Bonus Indexed Annuity works:
1. PURCHASE
You buy a Flexible Premium Bonus Indexed Annuity contract with help from your Bankers Life agent. You make one initial premium payment and receive an upfront premium bonus. After your initial payment, you can then make additional premium payments at your own pace, each of which will receive an upfront bonus and its own interest rate.
2. GROWTH
The money you deposit in your Flexible Premium Bonus Indexed Annuity grows tax deferred through premium payments you make on your own schedule, premium bonuses, and interest eared. Tax deferred means while your annuity is earing interest and you’re not withdrawing money, you don’t pay taxes on interest.
Your annuity features fixed and index-linked credit options, which you can allocate between to grow your income:
• Fixed rate credit option: guaranteed fixed interest rate of no less than 1%, grows regardless of an external market index performance
• Index-linked credit options: Monthly Averaging option with a par rate; Point to Point credit option with a par rate; and Growth performance linked to an external market index
No matter how you decide to grow your investments, you can rest easy knowing that your money is safe—because all annuities offer principal protection!
In addition, in the event you need access to your annuity funds due to an unforeseen situation or emergency, you may access your funds through withdrawals, often in seven days or less, subject to charges in the annuity’s early years.
Furthermore, automatically included convalescent care and terminal illness riders give you options if you require nursing home care or are certified terminally ill by a doctor.
Comments