Annuities
Annuities Guarantee Income Now!
Here are a few pointers to help you with your annuities research. 

Annuities are a contract in which an annuity company makes a series of income payments at regular intervals in return for a premium or premiums you have paid. Annuities are most often bought for future retirement income. Only immediate annuities, fixed deferred annuities and indexed annuities pay an income that can be guaranteed to last as long as you live.

The word annuity is a Latin word. You can find it in the oldest dictionary you have. Annuity means income. Annuities are neither a life insurance nor health insurance policy. It is not a savings account or savings certificate. You should not buy annuities to reach short term financial goals.

There are several different types of annuities. The word 'annuity' of course means income. The words 'deferred annuities' mean income later. The words 'immediate annuities' mean income now. There are two types of annuities, fixed annuities and variable annuities. The words 'fixed annuities' doesn't necessarily mean your interest is fixed, it means your premium earns a minimum guaranteed interest rate. Variable annuities, which involves risk means the dollars (your premium), you put into variable annuities can vary up and down.

There are two parts to fixed deferred guaranteed income annuities, a current interest rate and a minimum guaranteed interest rate. The minimum guaranteed interest rate is the lowest rate that
your fixed deferred annuity will earn. This rate is stated in the fixed deferred annuity contract. The current rate is linked to the reserves and interest the company earns on their portfolio, or for an external reference or index.

You can buy fixed deferred annuities and start your income thirty days later. However, it is better to wait twelve months, and then take the previous years earned interest through the second year of your deferred annuity.

With an IRA, you can put your individual retirement account inside of fixed annuities, the only vehicle that can provide a guaranteed retirement income to last you as long as you live. Annuity companies are required by law to have reserves that back up your guarantee in immediate annuities, deferred annuities, fixed annuities and variable annuities.

The State Insurance Department is a most vital department in each of our fifty states. Acting on its own state's annuity laws and regulations, it supervises all aspects of an annuity company's operation within that state.

Required Reserves Ensure Payment of Annuity Benefits. A large percentage of each premium dollar calculated by actuaries for each company goes into the annuity owner's reserve fund. This annuity reserve (Legal Reserve) fund is a liability to the deferred annuity or immediate annuity company.

The reserve liabilities are established as financial safeguards to ensure the company will have sufficient assets to pay its claims and other commitments when they fall due. Deferred annuities, fixed annuities and immediate annuities that comply with the legal reserve requirements established by the state insurance laws are known as legal reserve life companies.

Every year all annuity companies submit annual statements to the insurance departments of each state in which they are licensed to do business.

Today, as has been the case for many years, it is unlikely for the policyowner of annuities in life companies to lose their annuity benefits. Through strict state insurance department regulations, the establishment of many state insurance guaranty associations and because of the deferred annuity industry's history of financial stability and public responsibility to operate in a manner not detrimental to the welfare of the community, your annuities are secured by industry safeguards.