Annuity Insurance Company

An annuity insurance company one that is really a life insurance company. The company will pay you an annuity in the form of monthly payments for a period of time or for the rest of your life, depending on the policy that you choose. These types of insurance life policies have been developed to give a guaranteed income to the insured until they die or for a specific period of time, whichever comes first. The steady stream of monthly payments is referred to as “Annuity.” The person receiving the annuity payments is called the annuitant. The benefit that the annuity insurance company offers its customers is that it gives them a way to accumulate income for use later on that is free of income and capital gains taxes. Annuity insurance is becoming more and more a popular type of insurance to have. Annuity insurance companies are regulated by individual states and each state has a guarantee fund to protect investors that buy annuity life insurance. There is also a national organization called NOLHGA that co-ordinates all the states.

There are a variety of annuities such as life insurance annuities and annuity payments for investments. Life insurance companies are the only ones that can offer annuity contracts to their clients. An annuity insurance company offers annuity policies that consist of two phases. The first phase is the one where you pay money into your account and let it accumulate. This is called the deferral phase. The second phase is called the annuity or income phase in which the annuity insurance company makes payments to you for a stated period of time or until you die. The policy can also have a death benefit guarantee over a certain period of time, such as ten years.

As stated above, annuity insurance is protected under NOLHGA, the National Organization of Life and Health Guaranty Associations. If a life insurance company that offers annuity payments ever gets into financial trouble this organization steps in for them until the company gets back into better financial shape. Annuity insurance can give investors peace of mind. For those who do not like to take risks, the annuity insurance and guarantee of fixed annuities can be comforting. Inflation indexed annuities also offer a way for payments to increase during times of inflation. With annuity insurance you are guaranteed to never lose your principal and you can even receive a stated interest in return even if the market drops. Some Annuity insurance companies will even guarantee that your heirs will be reimbursed the exact amount that you put into the policy if you die.

A fixed annuity is similar to a CD. It pays a specific interest rate which is applied to your principal on a regular basis. Your funds are tied to the general funds of the insurance company and not tied to the stock market so you will not need to worry if the stock market goes down. A variable annuity is different. With this type the annuity insurance company does not hold the funds, instead they go into a pre selected collection of funds and the growth of the funds will depend on how well the investment does that you have pre selected.

A variable annuity insurance policy usually adds additional annuities insurance. You can buy riders to guarantee the safety of your principal. However, you can only make certain withdrawal amounts at specific times. The indexed annuities work in a similar fashion only you are guaranteed to never receive a lower interest rate. You are also able to take advantage of potential profit sharing if a specific index named in the policy increases in value.

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