2013 ANNUITY RATES & RATINGS

4.7% to 12.9% ANNUAL PAYOUT -- OR

PRE-ISSUED ANNUITIES ™ 4% to 8% APY

Choosing an Annuity

Which Annuity is Right for Me?

You are in the annuity information gathering mode with the goal of picking the best annuities for your financial future. Most people are curious about variable or fixed annuity rates. There are two fundamental annuities based on risk characteristics, namely fixed and variable, with two fundamental variations known as immediate and deferred… with numerous options for each category. Use this guide to chose the right one for your situation:

Shared Annuity Benefits

• Safety: Backed by highly rated state-regulated insurers
• Tax Deferral: Tax-deferred growth
• Higher Return: Better interest rates typically than CDs
• Life Insurance: Death payout guarantee options
• Liquidity: Flexible withdrawal privileges
• Unlimited Contributions, unlike IRAs and 401(k)s
• Inheritance: Pass money directly to heirs bypassing probate
• Lifetime Option: Income you can’t outlive (Annuitization or a Living Benefit Rider)

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Fixed Annuity

• Lump-sum or periodic contributions
• Invested in mostly high quality A-AAA bonds.
• No risk to client. Insurance company assumes all risk
• Guaranteed interest
• Modest growth
• 3% to 6% interest crediting possible
• 1- to 15-year term
• Predictable, simple
• Guaranteed retirement income
• No annual fees

Fixed Annuity with Indexing Options

[FIA, Fixed Index Annuity]

• Lump-sum or periodic contributions
• Invested in mostly high quality A-AAA bonds
• Fixed index annuities are never invested into a market index. They are only using the index as a gauge to credit the interest to the client.
• Annual intersected client. Insurance company guarantees principal
• Higher rate potential based on index performance (such as S&P 500, Dow Jones, NASDAQ, etc.)
• Moderate growth
• 4% to 8% interest crediting potential; varies with index performance
• 3- to 14-year term
• Sophisticated, greater potential
• Guaranteed retirement income options
• Annual fees, minimal to none

Variable Annuity

• Lump-sum or periodic contributions
• Invested in sub-accounts chosen by client
• Principal and interest are at risk. Client assumes all investment responsibility and risk
• Higher rate potential with corresponding investment risk
• Moderate to aggressive growth
• -5% to +10% returns possible; will vary with economic factors
• 3- to 10-year term
• Complex, greater potential and risk
• Guaranteed retirement income may fluctuate based on returns
• 2% to 5% annual fees

Immediate Annuity

• Lump-sum contributions only
• Invested in mostly high quality A-AAA bonds
• No risk to client. Insurance company assumes all risk
• Guaranteed income
• Minimal growth
• 1% to 3% Internal rate of return
• 5- 10- 15- 20- 25- 30-year and lifetime terms
• Immediate annuities are the opposite of deferred annuities since immediate annuities begin income soon after they are purchased in a lump sum
• Predictable, simple
• Guaranteed retirement income
• No annual fees

Deferred Annuity

• Deferral in annuities allows the value of the annuity to increase
• Deferred annuities can be purchased in periodic, systematic or lump sum payments
• Deferred annuities have the added advantage of tax deferral
• After a deferral period, an annuity can produce more income
• Deferred annuities can be annuitized providing a lifetime of income
• Deferred annuities are the opposite of immediate annuities since immediate annuities begin income soon after they are purchased in a lump sum
• Variable deferred annuities are typically invested in the securities market and the purchaser assumes the market risk
• Fixed deferred typically invested in high quality A-AAA government and investment grade bonds with no risk to the purchaser
• Fixed index deferred annuities are never invested into market index. They are only using the index as a gauge to credit interest to the client
• Deferred annuities are creditor-protected in most states
• CD deferred fixed annuity refers to a type of annuity that has a multi-year interest guarantee. Only bank-issued CDs are FDIC insured
• Deferred annuities are first guaranteed by the claims paying ability of the insurer and then each state has a State Insurance Guarantee Association (SIGA) with varying coverage limits

Each of the two categories of annuities, with their variations and options, serve a particular purpose. It is important to look at your age, size of assets, future income needs and inflation and then do a cash flow analysis over your life expectancy during retirement. This will help you choose which annuity is right for you. Financial planner/educators can be valuable when you are close to making a decision on an annuity. Avoid pushy insurance salesmen. Seek out a licensed planner/educator to assist you when making your final decision. State laws require annuities to be transacted through insurance licensed planners or insurance-only agents.

Question: How can you accomplish tax-free income or a transfer of tax-free wealth to your heirs using the benefits of an annuity with an IRA, 401k, etc.?

Answer: Convert the annuity to a Roth IRA using qualified assets. This can be a powerful combination. Enjoy the safety, growth and income of an annuity with the tax-free aspect of life insurance and the Roth IRA.

Annuity Guys Video Transcript:

Dick: We’re here for Annuity Rates Instantly and we’re frequently asked several questions on annuities over the telephone and by clients over emails. One of the questions we get asked a lot is what is the best annuity? And that’s what we are going to try and answer for you today, which annuity is the best annuity, and Eric, you want to expand on that for a minute?

Eric: Well, here’s the secret, the best annuity today is, just kidding, no the biggest question we always get is what is the best annuity and how do you determine the best annuity? There is no universal answer. The best annuity for you isn’t always going to be the best annuity for your neighbor and in some cases annuity isn’t the best financial vehicle at all.

So the one thing we always say is, you need to talk to someone to determine your financial situation, and take that inventory yourself of what your goals are and how to work through that, but then when you need you do determine that annuity is the right thing, it’s how do you determine one, what’s the right annuity and two, who to work with.

Dick: Well, you know we live in this instant society where we want an answer right now, and unfortunately, the answer we have to give and the answer we are giving right now is that there really is no exact best annuity. It really is determined by the individual situation. As Eric said, many times even an annuity isn’t in the client’s best interest at all, so a lot of times we have to tell a client you probably shouldn’t buy an annuity, based on the reasons you are giving us.

Eric: Now before you click pause and leave this video, because you’re going what the heck, they’re not even going to tell me what the best one is. Let’s give you a little background about some of the things that you need to take into consideration when you pick the best annuity for you.