Annuities
What's An FIA?
When it comes to your legacy and retirement, we can show you how FIA’s work.
What's An FIA?
An FIA is a fixed index annuity. As an insurance product, an FIA is not an investment, per se. Instead, it is an agreement issued by an insurance company and signed by the owner of the annuity. Each contract has its own criteria and terms. For example, certain rights and responsibilities of both the annuitant (that’s the policy holder) and the insurance company will appear in the contract. The insurance company has language in the contract that protects* your principal from loss. In addition, it may outline ways you may receive income from your annuity, backed by the claims-paying ability of the insurance carrier.
The FIA contract usually indicates how and when you may access money in the form of payments (income). For some retirees, an FIA may provide a way to give them income for the rest of their lives, backed by the claims-paying ability of the insurance company. Also, the principal stays safe with this agreement as well. So, what does an FIA have to do with retirement? In a word: safety. Total Financial Solutions can show you how an FIA works.
What's An FIA Annuitant
The annuitant of a fixed index annuity (FIA) is the one who receives the payout amounts. If you are planning to get income from your FIA, then the annuitant is you. There are other “roles” involved, as well. First, a licensed insurance advisor, such as Jon Loyhayem, may offer you some guidance regarding these types of annuities. In addition, other labels you’ll see when it comes to an FIA are:
Issuer (the insurance company)
Owner (the buyer)
Annuitant (receives the payout)
Beneficiary or Beneficiaries (receives the death benefit)
Discover: What's An FIA?
Your annuity contract holds the information about your FIA. For instance, which type of annuity do you have? What are the specific benefits and terms of your contract? Although other types of annuities exist (such as a fixed annuity and a variable annuity), FIAs have certain advantages. These include the ability to potentially see an increase in indexed interest without losing your principal when the index is down.
Do you see language in your contract about a “surrender period”? Specifically, this tells you the time period that you’ll need to let your money stay in the annuity before you begin payments or withdrawals. Usually, you have choices in terms of how long you want the surrender period to be. However, all FIA contracts will have some degree of an accumulation phase requirement. Be sure to connect with us to discover what some of your options might be.
What You Leave Behind
What’s an FIA when it comes to your legacy? In fact, FIAs usually offer a death benefit as well as income during your lifetime. In addition, if you want your spouse to also have income from the annuity after you pass away, that may be possible as well. You may have choices when it comes to when and how your family accesses your death benefits. For example, some people choose a lump sum. Others decide to take that money over time. There are terms and conditions for any choices you make within an annuity. So, be sure to connect with us to learn the specifics that may apply to you.
Always Evolving Financial & Insurance Agency is here for you so you can be there for your loved ones.
Now or Later?
In addition to benefits you may decide to leave to loved ones, an FIA may provide income during retirement as well. Typically, there is a certain percentage of your money available for withdrawal each year. Of course, this withdrawal should happen after your accumulation phase in order to avoid penalty. But, some of your money may be accessible sooner in certain emergency circumstances. Also, some retirees may choose to hold off on any income as a way to have potential indexed interest applied to a larger account amount.
Your retirement should be all about your choices. Contact us today to learn more about insurance and annuities concepts that may help you make those choices.
Disclosure & Disclaimer
We are not affiliated with any educational or government agency. This material is for informational purposes only and is not intended to be a solicitation for or offering of any product or investment. We do not provide investment, tax, or legal advice. Always consult with your own qualified advisors regarding your individual situation. Insurance and annuity products are not suitable for everyone. They involve fees and charges, including potential surrender penalties. Optional benefits and riders may involve additional annual costs. Life insurance requires medical and often financial underwriting to qualify. Loans and withdrawals from life insurance policies reduce policy death benefits and cash values, and may cause the policy to lapse or require additional premiums to remain in-force. Annuity withdrawals are subject to ordinary income taxes, and may incur a 10% IRS penalty if taken before age 59½. Product features and availability vary by state. Fixed indexed life insurance and annuities are not direct investments in the stock market or any index. The interest credited may be linked to the performance of an external index, but the contract does not directly participate in any index or equity/fixed interest investments, nor are you buying shares in an index. Crediting is subject to limits set by the issuing company, such as caps, spreads, and participation rates. Long-term care riders on insurance or annuity products are not a replacement for traditional long-term care insurance. Guarantees are backed solely by the financial strength and claims-paying ability of the issuing company. The offer and sale of insurance products may only occur in states where the agent is licensed and the product is approved for sale. Investment advice relating to securities may only be provided by a properly licensed individual through a licensed affiliate entity, unless otherwise exempt. Comments about past performance should not be construed as a guarantee or assurance of future results. This website may include concepts with legal, accounting, and tax implications. We do not provide specific legal or tax advice, nor do we promote, market, or recommend any tax plan or arrangement. Consult a qualified professional for guidance. No representation is made as to the accuracy or completeness of the information provided here or through any external links. Visiting this website does not create an agent-client relationship.
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