Annuity
Multi-Year Guaranteed Annuities
Index Annuities
Single Premium Immediate Annuities
MYGAs
This is deferred annuity that guarantees a declared crediting rate over a specific number of years. After that period of time, the crediting rate may be subject to change, but the funds are fully available without a surrender charge either because they have ended or there is a window of time provided to pull out money without penalty. Usually the longer the guarantee, the higher the crediting rate, but this is not always the case. Crediting rates are often enhanced by contributing higher amounts - usually $100,000 or more. MYGAs are for the person that wants to know in advance what the rate of return will be and do not want to take any risk. They are often compared to long term CDs.
Index Annuities
These are deferred annuities that determine the account value crediting rate by the performance of stock or bond index. The distribution of account value between various index accounts is determined by the client. Depending on the product design, the account value can be credited up 100% of an index gain with no risk of suffering a loss should the index lose value.
Often the crediting rate is limited by a performance cap, spread or participation rate.
Surrender charges vary between 5 years and 14 years. Index annuities are for people willing to take a small risk of little or no gain in exchange for the possibility of substantially higher returns.
SPIAs
These products provide a guaranteed income stream in exchange for a lump sum premium. The income stream can be set for life or for specific number of years or both.
These products are for people that need the security of a fixed income without risk of losing it.