Texas Annuity Summary

What is a Annuity?

An Annuity is an insurance contract designed to provide an investor with income for a determined period of time, usually when that person retires. Payments are paid on a monthly schedule and may continue for as long as you live or for a stated period of time. Payments may begin immediately (Single Premium Immediate Annuity), or could be deferred for a later date. Remember, Annuities are long term contracts and should not be considered if you are only interested in a short term investment period.

Types of Annuities

There are two types of annuites

1. Immediate Annuity
2. Deferred Annuity

An Immediate annuity provides and periodic income stream immediately after you have purchased the annuity. Immediate annuities are generally attractive to people who have recently retired and want to convert a portion of their savings or investment accounts into a guaranteed stream of income.

A Deferred Annuity, following the purchase date, provides an initial period of time to fund the contract, before payouts start. This in known as the accumulation period. Also, a deferred annuity could be a single premium investment for a retiree who wishes to place their money into a deferred annuity and allow the annuity to grow either in a fixed account or a indexed account. Once the invester decides that they would like to start the payout process, they can either choose the annuitization payout or with some annuity products, they could consider a lifetime income rider.