Annuities
An annuity can address a broad range of financial needs, from providing resilience and predictability in a financial plan to solving for longevity risk. Producers Choice’s team of annuity consultants can help provide viable annuity options that can play a key role in retirement income planning, legacy planning and fixed income portfolio diversification for your clients.
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Like most investments, annuities aren’t on-size-fits all. That’s why it’s essential to establish the specific goals your client wants to achieve through an annuity, and then select the strategies that best fit their needs. Producers Choice can help you explore what annuity strategies could enhance your client’s financial plan.
Provides income to the annuitant for a specified number of years or based on life expectancy (joint lifetime income options - e.g., husband and wife - are available).
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Income payments can begin within 1 year of purchase (SPIA) or can be deferred more than 1 year and typically much longer (DIA).
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Income payments are determined by interest rates and life expectancy of the annuitant at the time of policy issue.
SPIA / DIA
Pros:
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Simple
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Guaranteed income, and often the most efficient way to convert assets to guaranteed income
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DIA: Deferring payments allows for higher percentage income payouts
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Cons:
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Little to no flexibility with the asset or income election date after purchase
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DIA: no account value growth during deferral years
A deferred annuity that provides:
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Guaranteed tax-deferred growth at a fixed
interest rate -
Principal protection
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A death benefit
Fixed Annuity
Pros:
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Growth is guaranteed
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No market risk to principal
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No explicit fees, unless you elect
an optional rider
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Con:
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Earning potential is relatively low compared to other annuity type
A deferred annuity that provides:
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Tax-deferred growth linked to an index’s performance limited by a cap or participation rate
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Principal protection
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A death benefit
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Guaranteed lifetime income options
Indexed Annuity
Pros:
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Offers higher growth potential than a fixed annuity
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No market risk to principal
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Flexibility to reallocate across index strategies annually
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No explicit fees, unless you elect an optional rider
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Cons:
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Little to no flexibility with the asset or income election date after purchase
-
DIA: no account value growth during deferral years
A deferred annuity that provides:
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Tax-deferred growth linked to an index’s performance limited by a cap or participation rate
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Some principal protection from market loss limited by a floor, buffer or downside participation rate.
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A death benefit
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Guaranteed lifetime income options
Registered Index Linked Annuity
Pros:
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Offers higher growth potential than an indexed annuity
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Offers some downside market protection
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Flexibility to reallocate across index strategies annually
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No explicit fees, unless you elect an optional rider
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Cons:
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Growth is not guaranteed
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Potential for loss
SPIA / DIA
SPIA / DIA
Provides income to the annuitant for a specified number of years or based on life expectancy (joint lifetime income options - e.g., husband and wife - are available).
​
Income payments can begin within 1 year of purchase (SPIA) or can be deferred more than 1 year and typically much longer (DIA).
​
Income payments are determined by interest rates and life expectancy of the annuitant at the time of policy issue.
Pros:
-
Simple
-
Guaranteed income, and often the most efficient way to convert assets to guaranteed income
-
DIA: Deferring payments allows for higher percentage income payouts
​
Cons:
-
Little to no flexibility with the asset or income election date after purchase
-
DIA: no account value growth during deferral years
SPIA / DIA
SPIA / DIA
Provides income to the annuitant for a specified number of years or based on life expectancy (joint lifetime income options - e.g., husband and wife - are available).
​
Income payments can begin within 1 year of purchase (SPIA) or can be deferred more than 1 year and typically much longer (DIA).
​
Income payments are determined by interest rates and life expectancy of the annuitant at the time of policy issue.
Pros:
-
Simple
-
Guaranteed income, and often the most efficient way to convert assets to guaranteed income
-
DIA: Deferring payments allows for higher percentage income payouts
​
Cons:
-
Little to no flexibility with the asset or income election date after purchase
-
DIA: no account value growth during deferral years