Retirees can gain a lot by…
understanding fixed index annuities
For one thing, an FIA is simply a contract, that both you and an insurance company sign. Basically, this agreement outlines the details of the annuity insurance policy you bought. In addition, this document confirms the terms of your annuity, including the responsibilities and rights each party has. Also, it highlights when your money needs to stay in the annuity to grow and when it can be taken out.
It is possible to use certain annuities in order to have income for life.* For example, and FIA may give you a reasonable rate of return** over time, with the added bonus of keeping your principal safe. In this way, the annuity protects your money from loss is the market goes down. FIAs are usually a good financial strategy for some retirees who wish to secure their principal. Clearly, there are many options available when it comes to annuities. So, be sure to speak with an insurance professional, such as Choules Financial, with help in understanding fixed index annuities.
What Roles Are In An FIA?
Four roles exist when it comes to annuity contracts, particularly an FIA. In addition, having an insurance professional on your team who understands annuities thoroughly is also important. Those who are part of the annuity process include:
The insurance company that provides the annuity.
This is you (if you are the one buying the annuity)
Could be you, but doesn't have to be. The annuitant is the one who gets payouts from the annuity.
When you die, it is your beneficiaries who will receive your death benefit.
Details In Understanding Fixed Index Annuities
In your agreement, the insurance company will lay out all your annuity’s details. For instance, you’ll see things like which type of annuity you have (FIA, fixed, variable). Additionally, the contract will spell out terms and time periods. For example, you may have a certain number of years that your annuity must grow without you taking money out. Of course, if you need access to your money sooner, there may be options for you. However, the annuity has a “surrender period”, which exists for all annuities. Taking money out during that period is usually possible without a fee.
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Do Annuities Have a Death Benefit?
When Can I Withdraw My Money?
You can take out your money as income based on what your annuity contract says. Additionally, you will likely also see wording about how much (in a percentage) you are able to pull out. For example, an annuity contract may provide for up to 10% withdrawal per year. But, some annuities offer more choices and flexibility in terms of how you can get access to your money. For instance, maybe you only want to get money once per year. Or, you may not need the income one year, but decide to increase your % of withdrawal the next year.