Single Premium Income Annuity (SPIA)
A SPIA is a contract with an insurance company where you give them a lump sum of money, and the insurance company pays you a set amount every month for the rest of your life. This ensures you’ll never run out of money, and can be a useful part of a retirement plan for just about everyone.
Deferred Income Annuity (DIA)
A deferred income annuity sometimes referred to as a longevity annuity is a contract between you and an insurance company. You give up a lump-sum payment to the insurance company in exchange for a guaranteed lifetime income that begins sometime at a future date, up to 40 years later in some cases.
A Fixed Annuity is one that is based on safe, no risk investments. Therefore, the insurance company can declare a set or “fixed” interest rate and guarantee that rate for a specified period of time. The specified period may be for one year at a time or for a certain number of years, such as 5 years, 7 years or 10 years.
Fixed-Indexed Annuity (FIA)
A Fixed-Indexed Annuity is a type of fixed annuity. What makes this type of fixed annuity different is how the gains are credited. Instead of crediting a company-declared interest rate of say 2, 3 or 4 percent, the gains are linked or indexed directly to the performance of a stock market index, such as the Standard & Poor’s 500. Like other fixed annuities, there is a 100% guarantee of principal.
Variable Annuity (VA)
A variable annuity is a type of annuity contract that allows for the accumulation of capital on a tax-deferred basis. As opposed to a fixed annuity that offers a guaranteed interest rate and a minimum payment at annuitization, variable annuities offer investors the opportunity to generate higher rates of returns by investing in equity and bond subaccounts. If a variable annuity is annuitized for income, the income payments can vary based on the performance of the subaccounts.
Annuities can be confusing, let us educate you on the differences between them. Call us at (781) 540-1733
Guarantees are based on the claims-paying ability of the issuing insurance company. Guarantees do not apply to the investment performance or account value of the underlying portfolios. Early withdrawals or surrenders may be subject to surrender charges. Withdrawals may also be subject to ordinary income tax, if taken prior to age 59½, a 10% federal tax penalty may apply. Investments are not insured or guaranteed by the FDIC or any other government agency.
Securities offered through registered representatives of The O.N. Equity Sales Company. Member FINRA / SIPC One Financial Way, Cincinnati, OH 45242. (513) 794-6794. Investment Advisory Services offered through O.N. Investment Management Company.