We are happy to announce the grand opening of Maryland Annuity Resource. We know that many of our clients have benefitted from Annuities.
This website was designed and created to help educate all people of Maryland, Washington D.C., and Virginia about Annuities, Retirement options and creating an Income for Life through Insurance product like Annuities. Annuities are not for everyone, however there are many positives to owning an Annuity. Annuities are Insurance products offered by Insurance companies that have many nuances that are at first difficult to understand. You will find that owning an Annuity and reaping the benefits of your product far outweigh the returns you can receive in the market. The best thing, I think about Annuities is when your interest is credited, it is locked in and cannot go down. The market goes up and down. When the market goes up, your gains are locked. When the market goes down, you have an allocation option called the Inverse Performance Trigger. That is an option you can choose at anniversary or at contact opening. The Inverse Performance Trigger is kind of like shorting a stock. If the Index has zero gains, you are guaranteed a set return. If the Index has a negative return, you are guaranteed a set return.
There are many, many choices that you have to choose from. It all depends on your preferences. You have the S&P 500, Nasdaq, Russell 200 to name a few. The best thing about Annuities I think is that they have moderate surrender charges. It almost forces you to keep the account open. Remember this is money that you don’t really need for day to day living and you want to invest in your future. Each state has suitability guidelines you must meet to even be able to invest in an Annuity. The unique thing about Annuities is that they will offer you modest if not great returns based on the contract features that include floor rates and cap rates. Floor rates and the minimum that you can earn in returns. Cap rates are the max you can earn even if the index does better than the cap. There are also participation rates that some products offer. Participation rates are rates that offer potentially higher returns from the index you have allocated. If you choose a participation rate of 50% and the index has a return of 9%. You have just earned 4.5% on the funds you have allocated to that part of your annuity.
There are several types of Annuities and you have to educate yourself on which one best suits your needs. There are Fixed Annuities that offer a fixed rate of return similar to a CD with a bank. These Fixed Annuities offer guarantees from 1 to 10 years depending on the initial investment. These types of Annuities are ideally suited for Laddering strategies.
There are also Fixed Indexed Annuities. These types of Annuities have several options for Index choices as well as a couple of different options for income. First of all, the reason it’s called Fixed- Indexed is because there are two types of accounts inside of one. There is a fixed account that the insurance company will offer a guaranteed rate of return. Funds deposited through the year will usually get deposited into the fixed account until your annual allocation. There is also an Index Account that you allocate where your funds will be invested. Think of this as an account with one big basket with two little baskets inside of it. That is the best way I can explain it. Sometimes the insurance company will offer bonuses on premium for as long as 7 years. That means that any funds deposited into the account will receive a bonus. Some of these bonus annuities have lower cap rates so please look at all of your options.
The Fixed Indexed Annuities also have an Income feature. This feature is called an Income Rider. Some companies call it a Guaranteed Income Withdrawal Rider. A rider is an attachment to the original contact. The rider has a cost and offers anywhere between 5.5% for life to 6.5% for 10 years. Some Insurance companies have different options but what this means is that you agree to keep the annuity for a certain contract period in an in return you will receive income for a specified period of time, or even for life. Most contracts have a spousal continuance feature which means that if you elect to receive income from the Annuity, and you expire, your spouse will continue to receive the income for life. If there are any funds left in the account after both husband and wife expire, then the proceeds are distributed to the beneficiaries.
The last type of Annuity that we offer are Immediate Annuities. Immediate Annuities are offered by Insurance companies as a way to create a pension. Once funds are deposited with a Insurance company, the immediate annuity will pay a determined amount back to the annuitant each month, each year until the death of the annuitant. These Immediate Annuities can pay benefits for Life, Life with installment refund, Life with cash refund, or Certain. There are many options for all of these types of Annuities so please read all literature and examine the contracts closely to ensure that you know and fully understand each contract. We love Annuities and what they can provide for people. Income for life these days almost seems to good to be true but it is a reality that we help customers each day.
We hope you like our website and spread the word about it. We are open, honest and very transparent about what we do, what we offer, and how you get to where you need to be. That was a great first post and many more to come. If you have a specific question about your annuity, please feel free to call us or email so we can help you be clear on your financial decisions.
Jack Fleming – Insurance Broker
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