Many Americans are in danger of outliving their retirement savings. Annuities have many uses in financial planning, but one of the most important is providing a guaranteed income during retirement.

You can buy annuities through life insurance companies—in fact, annuities are a form of life insurance and, like life insurance, usually require a health questionnaire or medical exam. In exchange for paying a premium, the insurer will provide you with a monthly benefit for the term you select, which can be as long as the rest of your life…no matter how long you live.

Annuities come in many varieties. You can buy single-premium annuity that will, with just one payment, give you a guaranteed monthly payment for a set period or your lifetime. Joint-and-survivor annuities protect couples by paying a monthly benefit to one spouse and, when he or she dies, to the survivor. We can help you find the type of annuity that best meets your financial needs.

You can read more here about the different types of annuities, including fixed period, variable, single life and tax-sheltered annuities.

Annuities are contracts that require one party to make regular payments for more than one full year to another (the annuitant). In exchange, the annuitant pays a premium, as with life insurance. In fact, annuities are a form of life insurance. If you want to buy an annuity, you will likely have to undergo some sort of underwriting process.

Annuities fill many different needs in financial planning, so over the years, insurers have developed many different types, including:

Fixed period annuities

– pay a fixed amount to an annuitant at regular intervals for a definite length of time.

Variable annuities

– make payments to an annuitant varying in amount for a definite length of time or for life. The amounts paid may depend on variables such as profits earned by the pension or annuity funds or cost-of-living indexes.

Single life annuities

– pay a fixed amount at regular intervals during an annuitant’s life, ending on his or her death.

Joint and survivor annuities

– pay a fixed amount to the first annuitant at regular intervals for his or her life. After he or she dies, a second annuitant receives a fixed amount at regular intervals. This amount, paid for the life of the second annuitant, may be the same or different from the amount paid to the first annuitant.

Qualified employee annuities

– a retirement annuity purchased by an employer for an employee under a plan that meets certain Internal Revenue Code requirements.

Tax-sheltered annuities

– a special annuity plan or contract purchased for an employee of a public school or tax-exempt organization.

Annuities have many uses in financial planning, particularly in retirement planning. Some require a securities license to sell, in addition to a life insurance sales license.

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