Built DifferentFinancial GroupGet a quote A practical guide to fixed and indexed annuities, income options, surrender periods, liquidity, taxes, guarantees, and the role an annuity may play in retirement.
An annuity can transfer certain risks to an insurance company, including longevity risk or direct market-loss risk, depending on the contract. In exchange, the owner accepts contract rules that may include surrender periods, withdrawal limits, caps, spreads, rider costs, and tax consequences.
These answers are educational. Policy availability, underwriting, contract language, licensing, and individual circumstances determine what applies.
A fixed annuity credits a stated rate under the contract. A fixed indexed annuity uses an index formula subject to caps, participation rates, spreads, and a floor. Neither is a direct investment in the index.
Guarantees depend on the claims-paying ability of the issuing insurance company. Financial strength, contract terms, state guaranty limits, and diversification should be considered.
Most contracts allow some access, but withdrawals above stated limits during the surrender period may trigger charges. Withdrawals may also be taxable and can reduce future income guarantees.
No. An annuity should solve a defined income or protection problem. Liquidity, other guaranteed income, taxes, time horizon, beneficiaries, and total assets all affect suitability.
Insurance contracts that can provide tax-deferred accumulation, principal-protection features, or a stream of income—depending on the contract selected.
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