American Equity Annuities provide different options for investors. One of them that features so prominently is the traditional fixed annuity. This is usually a contract between the investor and the company, whereby the annuity earns a competitive interest rate, which is declared by the board of directors.
The interest is guaranteed and is given over a specific period of time. The annuity also comes with a guaranteed minimum interest during the period in which the contract lasts. There are usually no tax deductions with this option until the investor withdraws the earnings.
Some of the benefits that come with the annuity include a tax deferred growth as well as a competitive renewal and current interest rates. There are other options to choose from. These include immediate and deferred investments, although the choice depends on the individual needs of the investor.
Another advantage of the fixed annuity is that there is a guaranteed return on principal. This means that the principal value of the interest does not fluctuate. One will find that most of the fixed investments have guarantee on the return of principal payments. This is inclusive of surrender charges and net of withdrawals. There are also guaranteed interested rates whereby, they can fluctuate depending on the financial conditions but they do not go below the minimum rates stipulated in the initial agreement.
Taxes on interest in the investments are deferred until such a time when the investor will be willing to withdraw funds. There can also be other advantages on tax depending on the method of withdrawal that one settles for. The investments come with flexible income options since there are various ways in which the investor can withdraw money from the account.
One fact concerning the fixed investments is that assets in this annuity are transferred to the named beneficiary and they can also be passed outside the probate process. It is also important to note that there are no upfront charges on the sales or withdrawals and that one can either choose a single or flexible premium.
The annuity offers a great opportunity for systematic withdrawal of interests in a bid to comply with IRS minimum distributions. One can have additional liquidity in the event that the investor is confined into a nursing home or is diagnosed with a terminal illness. Early withdrawals might incur surrender charges but these can be waived in case of death.
American Equity Annuities also come in form of indexed annuities whose interests are linked to an external bond or equity index. The values of the indices can vary on a daily basis and they are hardly predictable. Purchasing them requires the investor to have an annuity contract that is backed by America Equity. The benefits include lifetime income benefit, flexible or single premiums, the choice of the index to be used for the calculation of interest and also the lack of upfront charges. Some of these are subject to change and therefore it important for an investor to keep checking so as to avoid inconveniences in future.
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Call Robert Eldridge directly at 800-643-7544.
Robert Eldridge holds over a decade of experience as a multiline agent in multiple states and currently serves on the membership council of the National Association of Insurance and Financial Advisors
Article Source: http://EzineArticles.com/expert/Robert_C_Eldridge_Jr/567280
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