Annuities

An annuity is a contract offered by an insurance company that provides future payments to the holder (the annuitant), usually at retirement, the value of which may fluctuate with that of an underlying securities portfolio or other index of performance or may grow at a fixed rate. With all annuities, your investment has the potential to grow tax-deferred until you begin taking withdrawals, so money that would have been paid in taxes each year remains invested to earn more for you.

The variable annuity contrasts with a conventional or fixed annuity, whose rate of return is constant and therefore vulnerable to the effects of inflation. Income on a variable annuity may be taken periodically, beginning immediately or at any future time. The annuity may be a single-premium or multiple-premium contract. The return to investors can be accomplished in many ways including a periodic payment that varies with the market value of the portfolio or by using one of a number of principal protection riders or income protection riders. These protection riders vary from one company to the next and are designed to offer some protection in down markets while providing upside potential.

Riders are additional guarantee options that are available to an annuity or life insurance contract holder. While some riders are part of an existing contract, many others may carry additional fees, charges and restrictions, and the policyholder should review their contract carefully before purchasing.

For more information please contact a Northeast Investment Representative.