Annuities have been around a long time-in fact, since the days when Rome ruled an empire. Roman contracts known as "annua" promised a stream of payments for a fixed period of time, or for life, in return for a single premium payment.

This type of "payout" annuity has not changed conceptually up to the present day.

If you enjoy the novels of Charles Dickens or Jane Austen, you've probably come across many references to annuities. They were the favored investment vehicle of the upper classes in 18th- century Europe and were known as a reliable way to generate income for the life of the beneficiary.

Annuity growth in the United States was spurred by the Great Depression, as investors sought a stable investment offered by reputable insurance companies of long standing.

An annuity is a contract issued by an insurance company. It is a unique financial product that provides tax deferral of interest and capital gains and the option (if funds are annuitized) of a guaranteed monthly income for life.

The typical consumer wants decent growth potential with a reasonable assurance of safety, all in one simple package. And no existing product does that better than annuities.  Annuities are a safe place to put your money that will provide you with a decent growth potential, protection from loss, a steady cash flow, and the flexibility to move your money when circumstances change.

Annuities

Annuities are a popular, tax-deferred investment vehicle for those in or near retirement (typically ages 50 to 85) who are looking for:

• A way to save and accumulate money for future needs
• Flexible income benefit options - helping hedge the risk of living too long and outliving your income
• Protection against living too long and outliving assets
• Tax-deferred growth opportunities
• Guaranteed death benefits

Annuities Have S.T.Y.L.E.

Mnemonic devices are used everday, to remember the names of the presidents, the date of some important historical event, and, now, we can also use them to remind us of the the advantages annuities have to offer. Annuities have S.T.Y.L.E.

S is for Safety

... which annuities offer in spades. All fixed annuities have guaranteed rates, making sure that no matter what happens in the market, your money is safe. If participating in the gains of the stock market is attractive to you, however, equity-indexed annuities offer the potential to participate in the gains, yet still be protected against the losses of the stock market - your premium stays safe, you continue to earn a minimum guaranteed rate, but market performance guides your potential gains.

Because life insurance companies offer annuities, state law and the financial strength of the insurance industry protect your money. The insurance companies that issue them are legal reserve companies, and as such are required by law to maintain substantial reserve funds to meet all their contractual obligations.

These companies are also continually scrutinized by third-party companies and rated for safety by trusted names like Standard & Poor's, Moody's, and the industry's leading rating service, A.M. Best, so you can quickly assay the historical stability of a particular company to enhance your peace-of-mind. In many states, annuities often enjoy enhanced protection from creditors, as well.

T is for Tax Deferral

... which goes hand in hand with compound interest. With tax deferral, you don't pay taxes on your earned interest until you use the money. This lets your savings grow in three ways: the interest you earn on your premium, the interest you earn on your accumulated interest, and the interest you earn on the money you didn't lose to taxes.

You may pay taxes on your earned interest eventually, but you'll have built up a substantially larger nest egg in the meantime. Tax deferral puts you in control, letting you choose when to pay those taxes, which is important because it's not just what you earn, it's what you keep that counts!

Y is for Yield

... an arena where annuities consistently outperform CDs and many other taxable savings plans. Annuities are offered at competitive, market-based interest rates, and historically, have offered a 1-2% advantage over CD rates. Demonstrably higher yields combined with the benefits of tax deferral make annuities a best bet for maximizing your accumulation of retirement savings.

L is for Liquidity

... another area where annuities shine because annuities give you access to your money in ways other savings plans don't. Most annuities have withdrawal provisions that provide you with penalty-free access to some of the value in your savings.

Most annuities can also be annuitized penalty-free at any time (in other words, converted into a series of payments). Most annuities also offer living benefits which can give you access to all or part of your money should you become confined to a nursing home, diagnosed with a terminal illness, or unemployed.

E is for Estate Planning Advantages

... where annuities allow for immediate transfer of benefits to your designated beneficiaries. Annuities aren't subject to the cost, hassle, delay, and lack of privacy of the probate process. Also, income taxes on the gains in your annuity are paid by your beneficiary, not by your estate (unless you have no designated beneficiary, in which case your estate is the beneficiary).

Annuities also, if set up properly, allow you a great deal of flexibility in the naming of beneficiaries. You can name your spouse, your children, a trust, or a charity as your beneficiary (and these are just example; the list of possible beneficiaries is longer), and any benefit is then taxed according to the tax rate of the beneficiary.

Your beneficiaries get their money immediately, and without legal fees or public scrutiny. What's more, you can name primary and secondary beneficiaries, so if for any reason your beneficiary is no longer in a position to receive funds, the benefits can be immediately transferred to a second named beneficiary, and you can change your designated beneficiary at any time.

No other savings plan offers all these advantages, and we've only just scratched the surface of these topics here. Just keep in mind that annuities have S.T.Y.L.E.

Let's review by Looking at these facts:

1. Stock and bond investments have been losing money hand over fist.
2. Bank interest is down to 1%.
3. People up in years need financial security.
4. Annuities are the best answer and most are backed by the 5-year United States
    Treasury Security.

Did you know.....

*Annuities  are  time  accounts  that  work  very  similar  to  a  CD  at the bank.
*Annuities offer a greater return on your money.  Annuity interest  rates have
  averaged more  than  a  CD   over   the   last  20  years.
*Most Annuities are  very safe investment vehicles.
*There are NO charges or fees to set up an Annuity.
*Your  money  grows  on  a  Tax-Deferred  basis,  which  means   more  return  on your
  money than a Taxable investment like a CD or Savings account.

*Annuities offer Settlement Options, which include the following:

  b.  Example: 
       1.  72 divided by 1 = 72 (it  would  take  72 years to double your money in a typical
       bank account at 1%).

       2.  72 divided by 5 = 14.4  (it  would  take  14.4  years  to  double your money in a
             typical  Annuity at 5%).

There is one restriction with  an Annuity:  Like  a  CD  at  the bank,  you can incur early
withdrawal  penalties  if  you   take   more  than 10%  out  during  the  first  few  years.

There are different types of Annuities available:

1.  Fixed Annuities, such as:

     a. Single Premium Deferred Annuity (SPDA):
         An Annuity that is  purchased  with one  lump  sum premium payment.
     b. Flexible Premium Deferred Annuity (FPDA):
         This Annuity allows additional  deposits to be made at your discretion.
     c. Immediate Annuity:
         You  put  a lump sum into  the Annuity and receive guaranteed monthly income for
         a  period of time, such as, 10, 15 , 20 years, or Life.

2.  Variable Annuities:

     You   get  all   the  advantages  related  to an  Annuity but your money is invested in
     stock or bond funds, so you lose some of the safety of a Fixed Annuity.