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What Is an Annuity?

An annuity, by definition, is simply an agreement to make a series of payments of a certain amount of money to a specified party for a predetermined period of time. Annuities also refer to a commercial insurance contract offered by a life insurance company. Annuities are designed to insure the contract owner against the risk of outliving one’s income. Older investors who run out of money to support themselves face a dire dilemma. Annuities were therefore created in order to mitigate this risk.

Annuities are built to protect this money and secure future income for when you’ll need it most, so it’s important to purchase your annuity from a reputable provider. CAL-KOR can help you to build a new life.

If your retirement is planned well, you could start traveling the world, or spend time with your family. The possibilities of a well-planned retirement are endless. With the right annuity plan, you can enjoy an annual profit for the rest of your life.

FIXED ANNUITIES

These are fixed interest investments issued by insurance companies. They pay guaranteed rates of interest, typically higher than bank CDs, and you can defer income or draw income immediately. These are popular among retirees and pre-retirees who want a no-cost, modest and guaranteed fixed investment.

FIXED-INDEXED ANNUITIES

These are essentially fixed annuities with a variable rate of interest that is added to your contract value of an underlying market index, such as the S& P 500, is positive. They typically offer a guaranteed minimum income benefit, and the chance of principal upside pegged to a market-based index. A drawback is that upside potential is limited by a so-called participation rate, caps or a spread — all methods in which your return in a rising stock market is trimmed. Consequently, buyers of these annuities never keep pace with a robust market. These appeal to retirees and pre-retirees who want to conservatively participate in potential market appreciation without fuss and with downside principal protection.

IMMEDIATE ANNUITIES

These are basically a mirror image of a life insurance policy. Instead of paying regular premiums to an insurer that makes a lump-sum payment upon death, the investor gives the insurer a lump sum in return for regular income payments until death, or for a specified period of time, typically starting one to 12 months after receipt of the investment. Payments are typically higher than other annuities because they include principal, as well as interest, and so also offer favorable tax treatment. These are popular among retirees and pre-retirees who need a higher-than-average stream of income and are comfortable sacrificing principal in exchange for higher lifelong income.

DEFERRED ANNUITIES

These delay payments until a future date (greater than one year). They enable people to increase their income stream later in life for less money because the insurance company is not on the hook as long when income payments are deferred. These appeal to people who want guaranteed income in the future, not now, or who want to create a ladder of income over different periods later in life. For example, they may want to work in retirement but know that eventually, they will stop working and, at that point, and not before, will need guaranteed income from an annuity.

Miscellaneous Services: We also handle IRA, SEP, 529 College Saving Plan, Long Term Care, and Disability Insurance as well.

For more information:  Tel: (213) 387-5000