Plans & Coverage
Annuities
An annuity is a contract with an insurance company. Depending on its terms, it may credit interest or provide income payments. Guarantees, access to money, costs, and tax treatment vary by contract; guarantees depend on the insurer's ability to pay its claims. Review the contract and consider how its terms fit your needs before buying.
Types
Fixed annuities credit interest under contract terms. Fixed-indexed annuities use an index-based formula, often with caps, participation rates, or spreads. Income annuities can provide payments for a chosen period or for life, depending on the contract and options selected. Access, charges, and guarantees vary; review the contract and insurer's claims-paying ability.
Questions, answered
Are annuities safe?
Risk depends on the product and contract. Fixed and fixed-indexed annuities generally do not place contract value directly in a market index, but withdrawals, surrender charges, fees, or contract adjustments may reduce what you receive. Guarantees depend on the insurer's ability to pay claims. Any state guaranty-association protection is subject to state law and limits. Review contract disclosures and your state's rules.
What is the difference between a fixed annuity and a fixed-indexed annuity?
A fixed annuity credits interest at a rate set under its contract. A fixed-indexed annuity calculates interest using an external index and contract terms such as caps, participation rates, or spreads. A floor may limit how a negative index change affects interest credited, but withdrawals, surrender charges, fees, or other contract adjustments can reduce the amount you receive. Review the contract for details.
Can an annuity provide guaranteed lifetime income?
Some immediate or deferred income annuities can be structured for payments over a person's lifetime, subject to the contract terms and the insurer's ability to pay claims. Payment options, including survivor benefits, affect the amount. Review the terms and trade-offs before purchasing.
Are there fees in annuities?
Costs vary by contract. Some annuities have explicit fees, including charges for optional riders; others reflect costs through crediting terms such as caps, participation rates, or spreads. Surrender charges or other adjustments may apply to withdrawals. Review the contract's disclosures for all costs and limits.
How do annuities fit with Social Security and Medicare?
Annuity tax treatment depends on the contract and how it is funded; some payments or distributions may include a nontaxable return of your investment, while taxable amounts may affect income used to determine Medicare IRMAA. We can discuss these considerations, but consult a tax professional about your situation.
Talk with a licensed agent
Free, no pressure — we can help review plans we represent.