25 % Bonus Deferred Indexed Annuity.
Rick Stolz CLU, ChFC, RHU, CLTC, LUTCF,
Since 1980 President at Diversified Insurance Brokers, Inc.
Deferred Indexed Annuity: A + Rated Company
A?deferred annuity?with a 25 % bonus is an insurance contract designed for?long-term savings. The new bonus annuity is extremely high as I write this article and will not last before it is reduced down mostly after this introductory offer. This product is designed for save and secure growth without risk of taking stock market loses.?During this time any earnings in the account are tax-deferred , including the 25 % bonus.
Example for every $ 100,000 contributed it is immediately worth $ 125,000
By using a deferred annuity,?there are several options available for the insured.
How a Deferred Annuity Works
The term “annuity” refers to a series of payments. Traditionally, annuities provide lifetime income.???When?one uses?a deferred annuity,?the money can be turned?into a?systematic?stream of income, or they can make?withdrawals as needed, take it all out in one lump sum, or transfer the assets to a different annuity or account.
A?deferred annuity allows?one?to keep control over the money and keep options open instead of irrevocably handing everything over to the insurance company in exchange for lifetime payments.
When used in that way, a deferred annuity is basically an account that?also happens to have some of the features of an annuity: certain tax characteristics, and possibly guarantees made by an insurance company (including the possibility of a?death benefit). Surrender charges may apply depending on the type of annuity chosen.
If?a decision is made?to annuitize,?the insured?can select a payment option from?the?insurance company’s list of choices.??For example,?they?might choose to receive income that covers lifetime only, or might prefer to have payments continue for?their?lifetime?or?their?spouse’s lifetime.
How Long?Can?Payments Be Delayed in a Deferred Annuity
The term “defer” refers to the fact that?there is a waiting period?to annuitize or take action on the annuity. Contrast that approach with an immediate annuity, which starts making payments more or less immediately after?the annuity is purchased.
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Once?payments start being withdrawn?from an immediate annuity, it’s difficult or impossible to stop the process and get the money back.??With a deferred annuity,?one can wait basically forever to being withdrawals.
How is Money?Added?to Deferred Annuities
Deferred annuities have an “accumulation phase,” which is the period of time before?becoming fully annuitized.??During that time,?the insured?can add funds to the account, assuming?the?insurance company and tax laws?allow this.??For example,?the insured?might make lump-sum or monthly contributions to the account or just leave it alone.
How Can?Money?be Withdrawn?from Deferred Annuities
After the accumulation phase comes the “payout phase” of the deferred annuity, which is when?the insured?can receive withdrawals.??Withdrawals after age 59 1/2 won’t incur penalty charges.????The annuity may be deferred indefinitely, or?the insured?can elect to receive payments in a number of different ways:
How?Does a?Tax Deferral Differ From a Deferred Annuity
Don’t confuse the timing of payments from a deferred annuity with?tax deferral, which is another feature available from annuities.
With tax deferral,?one?generally?will not?pay taxes on income inside of the annuity each year.??Instead,?the insured will only?pay?a tax?when the earnings are removed from a tax-deferred account.??Ideally, this allows?a?benefit from?compounding.? More money?is kept?in the contract,?earnings can be reinvested, and earn more on top of those earnings.
The tax-deferral concept is similar to the idea of a deferred annuity.??In both cases,?something is put?off for later,?whether it’s when?income is received??from an annuity or when?taxes are paid.
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