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What is annuity

In its most general sense, an annuity is an agreement for one person or organization to pay another a stream or sense or series of payments. Usually the term "annuity" relates to a contract between you and a life insurance company, but a charity or a trust can take the place of the insurance company.

There are many catergories of annuities. They can be classfied by:
Investment
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- Nature of the underlying investment - fixed or variable
- Primary purpose - accumulation or pay out (deferred or immediate)
- Nature of pay out commitment - fixed period, fixed ammount, or life time
- tax status - qualified or non-qualified
- premium payment arrangement - single premium or flexible premium

In General, annuities have the following attractives features:

- Tax deferred on investment earning
- Option of income tax free saving
- Protection from creditors
- An array of investment option, including "floors"
- Life time income
- Benefit to your heir
- Guarantee pay out

How much shoud I invest?

Unlike a 401k or an IRA, there are no limitation on the amount that you can invest. in an annuity. Whenever you are considering a deferred or immediate annuity, the amount of money you should consider putting into an annutiy depends on:

- Your immediate actual and potential financial needs.
- Your long term financial goals.
- your current saving/investment goal
- The range of alternative available to you

Of these, the most important is your immediate actual and potential financial needs. If you are buying a deferred annuity and you have a sudden need for cash, you can usually withdraw small amount without penalty. However, you will likely to pay a penalty if you make a large withdraw with in a few years after you've bought annuity. If you are buying an immediate annuity, you usually can't get any more than regular payments. No matter how badly you need cash. However, if you have other sources of cash that are sufficient for any emergency or unforseen needs, then the immediate need criterion is satisfied and the other criteria become more important.

Call us today to speak with a licensed professional who will answer all of your annuity question. Talking to BA professional is only one call away.
This isn't part of any policy issued by its affiliated insurers and is not a binding part of any insurance. Contract which may be applicable to you. It contains only general information and description of the coverages which may be provided and doesn't include all of the features, exclusions, and conditions of the policy. It describes certain coverages features and credits vary by the clients, and may not be available to all insureds. BAP suggests you that you read your policy very carefully or consult with us to determin your actual coverages with licensed BAP professionals. In the event of loss, the terms of your policy will determine your coverages. Any difference in coverages descriptions between this writing & your policy are inapplicable and should be disregarded.


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