Annuities are cash contracts you enter into with an insurance company. They differ from traditional term life insurance policies. Term life insurance policies base their policy on your mortality risk and how long they expect you to live to pay into the policy. Annuities are an investment, not a policy, based on your mortality risk index. By purchasing an annuity you are making a purchase into a fund either with a large sum of money or several smaller payments into a fund over a period of time. The annuity fund issuer credits the annuity fund with a certain rate of interest which is a non taxable amount to the annuitant. This allows your annuity to grow and become an investment rather then a policy which promises to pay a certain amount of money upon your death. Your final payout amount is calculated through a combination of your amount of deposits and the interest rate you have gained on that amount.

We offer two types of annuities. One type of annuity is a deferred annuity. A deferred annuity can be funded in two types of ways either a lump sum or in periodic payments. This allows for a greater amount of flexibility in setting up your annuity. The deferred annuity also allows you to earn interest on a tax deferred basis. There are no taxes imposed on the amount during the accumulation of the entire amount of the annuity and you only pay taxes once the benefits are enacted.

The second type of annuity is an immediate annuity. This is designed to make benefit payments to the annuitant at one payment intervals from the date of purchase. Immediate annuities require you to make one lump sum payment and then pay out monthly from the date of purchase.

Choosing an annuity which fits your needs will allow you to invest money safely and give you some control over the amount of money that you are taxed on your investment. If your unsure of which would be best for you, you may contact an annuity lawyer or insurance company that sells annuities and speak with someone.