Annuity Basics

What is an annuity?

An annuity is a contract with an insurance company. Depending on the contract type, it may be used for tax-deferred accumulation, principal protection features, future income, or a combination of benefits.

• Fixed annuities generally credit a declared rate for a stated period.
• Indexed annuities use formulas tied to an external index and may limit upside and downside.
• Variable annuities use investment subaccounts and can rise or fall with market performance.

Review surrender charges, liquidity limits, fees, rider costs, tax treatment, insurer strength, and suitability before making a decision.