Missouri Department of Insurance Offers Annuity Resources
Targeted News Service |
Annuities are investment products sold by insurance companies. Consumers buy annuities to generate income or interest on their savings. A consumer pays a lump sum or makes periodic payments to the insurance company. In exchange, the annuity provides periodic payments to the consumer.
"As consumers plan for their retirement, they may want to consider annuities as a way to safeguard their financial future," said
ANNUITIES
There are several types of annuities available with varying levels of risk and guarantees. It is important to understand the different types and benefits offered before you select one.
* Single premium annuity: You pay the insurance company once.
* Multiple premium annuity: You pay the insurance company multiple payments.
* Immediate annuity: You receive income payments within one year of paying the premium.
* Deferred annuity: After the initial savings phase, you receive income payments once you choose to receive them.
* Fixed annuity: Your money, minus any applicable charges, earns interest at rates specified in your contract.
* Variable annuity: The insurance company invests your money, minus applicable charges, in a separate account based on the amount of risk you want to take. The money can be invested in stocks, bonds or other investments.
* Equity-indexed annuity: This variation of a fixed annuity bases the interest rate on an outside index, such as a stock market index. The annuity pays a base return, but it may be higher if the index increases.
Consumers should contact a licensed agent or broker to make sure an annuity is the right fit for their retirement package. As with other major purchases, consumers should shop several insurance companies. Don't get pressured into buying an annuity.
If you are dissatisfied with an annuity once you receive it,
Consumers can get more information about annuities by calling 800-726-7390, or visiting the department's annuities FAQ page (http://insurance.mo.gov/consumers/life-annuities/AnnuitiesFAQ.php).
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