AIB offers a variety of both Traditional Fixed and Indexed Deferred Annuities through many annuity companies, along with our other insurance products. Our interactive on-line Annuity Brokerage Bulletin is available for both NY and National annuities and can be emailed to you automatically twice monthly (more often in a fluctuating interest rate environment). The Bulletin features the current interest rates and product features for our most competitive companies. Several of these companies provide full illustration capabilities for their products. Our annuity support team is always glad to provide product information and discuss options that may be appropriate for your client.
We also provide assistance with completion of your Regulation 60 Annuity to Annuity Disclosure Statement. Once you provide a signed Definition of Replacement and Authorization to Disclose the Contract Information, we are pleased to request the information, complete the forms and email, or mail the forms to you for your client's signature, saving you time and effort! In addition, the annuity support team performs continual follow up on the transfer of funds into the new contract to make the transfer smooth and quick.
All company forms and brochures can be emailed to you so there is no delay or can be mailed upon request.
How Annuities Work
Annuities are financial products that provide a stream of payments in exchange for a lump sum payment or series of payments. They offer tax-deferred growth and may have riders for additional benefits, but also have surrender charges and limited liquidity. There are three types of annuities: fixed, variable, and indexed. They can be a good source of guaranteed income, particularly during retirement, but policyholders should consider their investment goals and risk tolerance before purchasing one. It is also important to review the terms and conditions of the policy.
Types of Annuities
There are several types of annuities, including:
Fixed Annuities
A fixed annuity is a type of insurance contract that provides a fixed rate of return and a fixed series of payments over a predetermined period of time in exchange for a lump sum payment or series of payments. They offer tax-deferred growth and are often used as a source of guaranteed income during retirement. They are low risk investments, but may have surrender charges and limited liquidity. It is important to review the terms and conditions before purchasing a policy.
Variable Annuities
A variable annuity is a type of insurance contract that allows the policyholder to choose from a range of investment options and allocate investments among different asset classes. It offers the potential for higher returns, but also carries more risk as the value of the annuity is dependent on the performance of the underlying investments. It may offer riders for additional benefits but may also have surrender charges and limited liquidity. Policyholders should consider their investment goals and risk tolerance before purchasing a variable annuity.
Indexed Annuities
An indexed annuity is a type of insurance contract that links the rate of return to an index, such as the S&P 500, with a minimum guaranteed rate of return. It offers the potential for higher returns than a fixed annuity, but returns are typically capped and subject to a participation rate. It may offer riders for additional benefits but may also have surrender charges and limited liquidity. Policyholders should consider their investment goals and risk tolerance before purchasing an indexed annuity.
Immediate Annuities
An immediate annuity is a type of insurance contract that begins making payments to the policyholder immediately upon purchase. The policyholder makes a lump sum payment to the insurance company, and in exchange, the company begins making regular income payments for a predetermined period of time. Immediate annuities are often used as a source of guaranteed income during retirement and offer tax-deferred growth. They are low risk investments but may have surrender charges and limited liquidity. It is important to review the terms and conditions before purchasing a policy. Immediate annuities are available through AIB with quotes from multiple companies provided as a customizable matrix for ease in presentation.
Deferred Annuities
A deferred annuity is a type of insurance contract that allows the policyholder to make contributions over time and receive payments at a later date. The policyholder can make a lump sum payment or series of payments to the insurance company, and the value of the annuity grows tax-deferred until the payment period begins. There are three types of deferred annuities: fixed, variable, and indexed. Deferred annuities may offer riders for additional benefits but may also have surrender charges and limited liquidity. Policyholders should consider their investment goals and risk tolerance before purchasing a deferred annuity.
Benefits of Annuities
Annuities can offer several benefits to policyholders, including:
Guaranteed income: Annuities provide a guaranteed stream of income payments that can last for a specific period of time or for the policyholder's lifetime. This can be particularly useful for individuals who are looking for a reliable source of income during retirement.
Potential for tax-deferred growth: Some annuities offer tax-deferred growth, allowing the policyholder to potentially earn more on their investments over time. This can be a good option for individuals who are looking to grow their savings without having to pay taxes on their investment earnings until they begin receiving income payments.
Estate planning: Annuities can be used as part of an estate plan to provide income to heirs or to support charitable giving. This can be a useful tool for individuals who want to ensure that their assets are distributed according to their wishes after they pass away.
Flexibility: Annuities offer a range of payment options, including fixed payments, variable payments, and combination payments. This can allow policyholders to tailor their income stream to their specific needs and goals.
Security: Annuities are backed by insurance companies, which means that they are generally considered low-risk investments. This can provide policyholders with peace of mind knowing that their investments are backed by a reputable and financially stable institution.
It is important to carefully consider your investment goals and risk tolerance before purchasing an annuity, as they may not be suitable for everyone. Annuities may have surrender charges if the policy is cancelled within a certain time period, and policyholders may not have access to their principal until the end of the payment period. It is also important to carefully review the terms and conditions of the policy to understand what is and is not covered.
Risks of Annuities
Annuities carry some risks that policyholders should be aware of, including:
Loss of principal: The policyholder may lose some or all of their investment if the underlying investments perform poorly. This risk is particularly relevant for variables, which whose returns are linked to the performance of underlying investments.
Surrender charges: Some annuities may have surrender charges if the policy is cancelled within a certain time period. This means that the policyholder may have to pay a fee to access their money before the end of the payment period.
Complexity: Annuities can be complex financial products, and it is important to carefully review the terms and conditions before purchasing a policy. Policyholders should be sure to fully understand the features, benefits, and risks of an annuity before making a decision.
Lack of liquidity: Annuities typically have limited liquidity, meaning that policyholders may not have immediate access to their money. This can be a drawback for individuals who may need to access their funds in an emergency or for other unexpected expenses.
It is important to carefully consider your investment goals and risk tolerance before purchasing an annuity, as they may not be suitable for everyone. It is also important to carefully review the terms and conditions of the policy to understand what is and is not covered. It may be helpful to consult with a financial professional before making a decision about whether an annuity is right for you.
Choosing the Right Annuity Products for You
We always tell our customers, when choosing an annuity, it is important to consider your investment goals and risk tolerance, as well as the terms and conditions of the policy. It may be helpful to consult with the financial professionals at Advisors Insurance Brokers to get advice to determine which type of annuity within our services is right for you before you make a choice.
To request a matrix, please fax the Proposal Request for Immediate Annuities form to (518) 371-6131 or call (800) 695-8224, x136 or (518) 688-8136 for Jeannie Knapp, Annuity Sales Coordinator.
For immediate annuities also, we gladly provide Regulation 60 assistance. Here also, all forms can be emailed immediately, or mailed at your request.
Along with the matrix, we provide a separate profile of the ratings, assets, and liabilities of the companies quoted. This is an excellent tool when in competition or when proposing immediate annuities to clients.
Any questions or would like a brief tutorial? Contact:
Jeannie Knapp, Annuity Sales Coordinator
(800) 695-8224 x136
(518) 688-8136
jknapp@advisorsib.com
Frequently Asked Questions About Annuities
Can I cancel my annuity?
Some annuities may have surrender charges if the policy is cancelled within a certain time period. It is important to carefully review the terms and conditions of the policy with your advisor to understand what is and is not covered and whether there are any fees associated with cancelling the policy.
Can I access my money from an annuity before the end of the payment period?
Annuities typically have limited liquidity, meaning that policyholders may not have immediate access to their money. Some annuities may offer withdrawal options, but these may come with fees or other restrictions. It is important to carefully review the terms and conditions of the policy to understand what is and is not covered and whether there are any fees associated with accessing your money.
Can I change the terms of my annuity?
It may be possible to change the terms of an annuity, but this will depend on the specific terms and conditions of the policy. It is important to carefully review the terms and conditions of the policy to understand what is and is not covered and whether there are any fees associated with making changes to the policy.
Is an annuity a type of life insurance?
An annuity is a type of financial product that provides a stream of payments in exchange for a lump sum investment or series of payments. It is not a type of life insurance.
Life insurance is a type of insurance that pays a death benefit to the designated beneficiary when the insured individual dies. There are several types of life insurance, including term life insurance, which provides coverage for a specific period of time, and permanent life insurance, which provides coverage for the policyholder's lifetime.
Annuities and life insurance are two different financial products that serve different purposes. Annuities are typically used as a source of guaranteed income, while life insurance is used to provide financial protection for the policyholder's loved ones in the event of their death.
Do I purchase an annuity through my broker?
You can typically purchase an annuity through a broker or a properly licensed insurance agent. A broker is a financial professional who can help you evaluate different annuity options and assist you in purchasing a policy that meets your needs and goals.
When working with an agent or broker, it is important to carefully consider your investment goals and risk tolerance and to fully understand the terms and conditions of the annuity policy before making a decision. It is also a good idea to shop around and compare quotes from multiple brokers to ensure that you are getting the best deal.
It is important to note that annuities are complex financial products, and it is important to carefully review the terms and conditions before purchasing a policy. It may be helpful to consult with a financial professional or an attorney before making a decision about whether an annuity is right for you.
It is important to carefully consider your investment goals and risk tolerance before deciding which type of retirement savings option is right for you. Call AIB if you are looking for an opportunity related to retirement plans or need an annuity broker.