Annuity Investment Options

What are the different annuity investment options?

Fixed Annuities: If you are looking for a guaranteed rate of return, may be in one to ten years, fixed annuities can be the solution. Fixed annuities are invested primarily in high-grade corporate bonds and government securities.

Market Value Adjustment: The annuity is somewhat similar to the Guaranteed Return Annuity. The only difference is that there is no guarantee of funds if rates are high and then you need to end or surrender your contract.

Guaranteed Return: This is a fixed annuity that guarantees almost 100% return of your investment. The interest rate does not vary and you can surrender your contract if your initial investment gets depleted due to market variations.

Variable Annuities: If you want to invest in specific funds or into sub-accounts, you can opt for variable annuities. These sub-accounts vary according to the prevalent market rate.

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Conservative Type: This type is for money market, guaranteed fixed accounts and government bonds.

Aggressive Type: This is for small capital markets funds, mid capital markets funds, large capital markets funds, capital appreciation, aggressive growth, emerging markets funds and growth markets funds.

Special Type: Special type variable annuities are actually living benefit annuities.

Bonus Annuities: This offers you a bonus option of 3 to 5%. With bonus annuities, it is easy to take out your money. All the broker needs to do is agree and reduce his commission and you receive the bonus in return. This annuity will take at least seven years to mature. But, this annuity plan has penalties for early withdrawal. Deferred Annuities: In a deferred annuity, you will receive payments starting at retirement. You can invest either in a lump sum or make payments over a specified length of time. Also, you can invest in either fixed or variable type accounts. These funds grow tax-deferred till the time you start receiving funds.

Immediate Annuities: You will start receiving payments immediately upon investing in the annuity. This is the perfect choice for you if you need immediate income from an annuity. You have the options of a fixed payment that does not change or a variable payment that is based on the annuity's performance.