Understand the different types of annuities to choose the right one for you – St George News

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FEATURES — Annuities are financial products that provide a guaranteed income stream in exchange for a lump sum payment or series of payments. There are several different types of annuities, including fixed, variable and indexed, each with its own features and benefits.

Here is an overview of how annuities work:

• An individual enters into a contract with an insurance company to purchase an annuity.
• The individual makes a lump sum payment or a series of payments to the insurance company.
• The insurance company invests the payments and earns a return on the investment.

Or the individual can choose to receive the income from the annuity in a number of ways, such as:

• A fixed amount each month, quarter or year
• A variable amount that depends on the performance of the underlying investments
• A combination of the two

The income payments from the annuity are guaranteed for a specified period of time or for the remainder of the individual’s life.

A common type of annuity is a fixed annuity, which provides a guaranteed rate of return and a guaranteed income stream for a specified period of time. The income stream can be received all at once in a lump sum, or it can be received in installations over a period of time.

Before making a purchase, it is important to carefully review the terms of the annuity contract, including the fees, surrender charges and any restrictions on withdrawing funds.

Copyright © Lyle Boss, all rights reserved.

Lyle Boss is a member of Syndicated Columnists, a national organization committed to a fully transparent approach to money management. As an asset protection educator, he has helped thousands of seniors navigate their financial retirement options. His clients include government employees, teachers, physicians, farmers and business executives, to name a few. Boss has actively taught advanced estate planning and asset preservation for more than 20 years in such places as the University of Utah and in over 200 “Senior Retirement Consumer Education Workshops” throughout Utah, Idaho and Wyoming. Boss and his wife, Deanna, live in South Ogden and St. George, Utah.