What You Need To Know – An Overview Of Annuities Continued
June 24, 2020 by Wade Pfau
This chapter is about how the lifetime income protections available through deferred variable annuities can support a retirement income goal through risk pooling and mortality credits. The next chapter adds fixed index annuities. We have already considered immediate and deferred income annuities. It is worthwhile to start by stepping back to describe the universe of available annuities more completely.
A fundamental component for the definition of an annuity is that it is a contract which can be structured to provide a series of payments from the insurance company, either for life or for a fixed period. However, today there are many annuities where this payment aspect
downplayed. As the tax code in the United States provides tax advantages for annuities, other forms of annuities have evolved with a greater emphasis on providing tax-deferred growth for the assets in the annuity with a de-emphasis on their income-generating abilities. But any annuity must provide a method for being annuitized into a series of payments.