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Annuities are issued by life insurance companies and purchased in the form of “contracts.” Two broad categories encompass all annuity types: accumulation annuities and payout (or income) annuities. Common benefits to annuities include:
Accumulate wealth without incurring market risk
Generate stable, predictable retirement income
Provide benefits to pay for long-term care expenses
Pass wealth to beneficiaries on your terms
Annuities are issued by life insurance companies and purchased in the form of “contracts.” Two broad categories encompass all annuity types: accumulation annuities and payout (or income) annuities.
Common benefits of annuities include:
An annuity is categorized as “fixed” by the fact that the contract value does not change with outside factors, such as the stock market or bond market. By contrast, a “variable” annuity’s value does fluctuate with changes in the markets.
Individuals seeking long-term conservative growth with the advantage of tax deferral fit the typical profile of accumulation-annuity buyers. They seek an attractive rate of return but do not wish to expose their money to value fluctuations associated with traditional equity or debt instruments (stocks, bonds, mutual funds, etc.). Accumulation annuities vary by the way in which interest credits are applied. Interest credits may be based on a one-year renewable fixed rate, a multi-year rate that applies for several years, or on the positive results of a market index, such as the S&P 500® Index.
Accumulation annuities are differentiated by a variety of attributes, including: the ability to add premium after the initial purchase, maximum issues ages, minimum premium amounts, crediting options, length of surrender-charge schedules, premium bonuses, withdrawal options, and a variety of riders.
EquiTrust Accumulation Annuities
Fixed annuities are an effective vehicle for providing the owner with income, and are popular among retirees. Income can be generated in several ways. An immediate annuity pays a guaranteed and specified cash flow comprised of both principal and interest for a selected period of time – which may be for the life of the owner(s), or a specified period of time. Upon the death of the owner(s), immediate annuities have no residual value. Income can also be derived from accumulation annuities, either through annuitization of the contract, or by way of an income rider.
EquiTrust Payout Annuities
Life insurance is issued in the form of a policy from a life insurance company. In exchange for premiums paid by the policyholder, life insurance is designed to pay a death benefit to a designated beneficiary upon the death of the insured person.
Advantages of life insurance include:
EquiTrust offers single-premium, indexed life insurance. The policyholder pays a one-time, lump-sum premium payment that funds the policy. The Accumulation Value of the policy grows based on the performance of a market index, but funds are not directly tied to an index, meaning your policy Accumulation Value is not exposed to market risk.
EquiTrust Single-Premium, Indexed Life Insurance