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Annuities are designed to give savers a long-term growth and retirement planning vehicle. They offer many benefits including both tax deferral and retirement income. Features of an Annuity:Tax deferral Retirement income through systematic payouts, including lifetime guaranteed income options from annuitization Variety of payout options Penalty-free withdrawals (available through most contracts) The potential to avoid probate at death Surrender charges An IRS excise tax for most withdrawals taken prior to age 59 1/2. There are two broad categories of Annuities Fixed and Variable Annuities. The following section explains the main differences between these two categories.


Declare a current interest rate, participation rate, and/or index margin Guarantee a minimum rate of return Guarantee a return of principal if held to term Regulated as an insurance contractNo securities license is needed to sell Includes Index Annuities


Separate account returns are based on market performance Investor bears the market risk Prior earnings and principal are subject to loss Regulated as a security and an insurance contractSecurities license is necessary to sell. Fixed Annuities include both Traditional Fixed Annuities and Index Annuities. Because Index Annuities include similar guarantees as a Traditional Fixed Annuity, they are not considered a variable product, and therefore a securities license is not necessary to sell them. The main difference between a Traditional Fixed Annuity and an Index Annuity is that an Index Annuity's interest earnings are based on the performance of an external Index, and the Index accounts do not include a declared interest rate. Index Annuities Features Excess interest based on Index performance Do not include a declared interest rate (Index Account crediting method only)