For Consumers

Benefits of choosing an annuity

Annuities provide three main benefits:

  1. Death benefits - The basic death benefit offers a guarantee that when you die, the insurer - at a minimum - will pay out the amount you paid in.
  2. Living benefits - People often buy annuities with retirement in mind, because annuities can pay out in lump-sum amounts or provide a guaranteed income for as long as they live.
  3. Tax deferral - You aren't taxed on any interest, dividends or capital gains that accumulate inside of your annuity contract until you take a withdrawal. However, if you withdraw money prior to age 59 1/2, you may be subject to an additional 10 percent penalty tax.