Annuities Flashcards
1
Q
Annuity
A
An annuity is a retirement plan, not life insurance, used to liquidate an estate. Prevents the risk of outliving your money and earnings grow tax-deferred
2
Q
Owner, annuitannt, and beneficiary
A
Owner - purchases the annuity contract and pays the premium
Annuitant - receives the payments which are based on the amount, age, and gender
Beneficiary - receives cash value or premiums, whichever is higher, if the annuitant dies during the accumulation phase. Interest is taxable
3
Q
Accumulation Period
A
- Pay in period
- building your estate
- Grows tax - deferres
- money belongs to the policy owner 
4
Q
Annuity Period
A
- Pay out period
- money belongs to the company
- policy owner gets the payout
5
Q
How are premiums paid?
A
Single premium - one lump sum
Level premium - same payment frequency
Flexible premiums - periodic or many
Premiums are not tax deductible 
