Single Premium Immediate Annuity
Choose Guaranteed Income for Life
Are you planning for retirement, entering retirement or interested in a steady stream of income? Your retirement does not have to mean the end of your income. A financially secure retirement requires vigilant preparation. A Single Premium Immediate Annuity is a safe, guaranteed income stream that cannot be outlived when you choose one of the life income options. It's an an excellent way to provide you with income or supplement your income throughout your retirement years. Here are some answers to frequently asked questions.
What is a Single Premium Immediate Annuity?
A Single Premium Immediate Annuity is a contract between you and an insurance company that provides you with immediate income. When you pay the insurer a lump sum premium payment, the insurer guarantees to make regular payments to you. These payments continue for as long as you live, or for a fixed period of time that you choose, such as 10, 20 or 30 years. An immediate annuity with joint settlement options may also provide income to another person, such as a surviving spouse.
What does an immediate annuity offer?
- An immediate annuity can help with basic monthly fixed expenses such as housing, food and healthcare because it provides you with a "regular check." n An immediate annuity can provide income for early retirees, because it can bridge the gap until pension or Social Security payments begin.
- Earnings are tax-deferred. By receiving income on a gradual basis, as opposed to withdrawing it in a lump sum, you are able to defer taxes over time.
- An immediate annuity provides steady income even in an uncertain market.
How do I pay for an immediate annuity?
You can pay for an immediate annuity from a portion of your accumulated assets in the form of cash, from one of the following:
- An IRA, 401(e)(3) plan, pension plan
- The sale of property or a business
- Stocks, bonds, certificates of deposit, mutual funds
- Proceeds of a life insurance policy
- Inheritance, divorce settlement, gifting, or other windfall
What fees are associated with an immediate annuity?
There are no administrative fees or surrender charges.
What are payout options?
A payout option establishes how you want your lump sum premium payment distributed to you over a selected period of time. Selection of a payout option is an important decision since once annuitization begins, the payout option cannot be changed. A Mutual Trust Life Insurance Company advisor can illustrate several payout options so you can choose the best one for you.
Payout options with a Mutual Trust Single Premium Immediate Annuity
- Life option provides income payments to you guaranteed for as long as you live.
- Fixed Period option gives you a guaranteed income only over a period of years specified by you. In the event of your death during this period, your beneficiary will receive the income for the remainder of the period.
- Life Income with Period Certain option provides a guaranteed income for the number of years you choose or for the rest of your life (whichever is longer). In the event of your premature death during this period, your beneficiary will receive the payments for the remainder of the period.
- Joint Life and Survivor option pays as long as either you or the survivor is living. After the first death, payments will continue according to the plan you have chosen.
- Installment Refund option pays an income for life with guaranteed payments that total the amount of the proceeds. In the event of your death before receiving all the guaranteed payments, your beneficiary will receive the present value of the remaining guaranteed payments.
- Joint Life and Survivor Installment Refund option pays as long as either you or the survivor is living with guaranteed payments that total the amount of proceeds. After the first death, payments will continue according to the plan you have chosen. In the event that both you and the survivor dies before receiving all the guaranteed payments, your beneficiary will receive the present value of the remaining guaranteed payments.
How much income will I receive each month?
The amount of income you will receive is dependent on the following factors:
- The amount of your initial premium payment
- The payment option you have chosen
- Any joint and survivor benefits if chosen
- Your age at the time of purchase, with the life income option only
- The rates in effect at the time of purchase
Will the insurance company keep all my future payments if I suddenly died tomorrow?
Many individuals are apprehensive to purchase an immediate annuity because they believe that the insurance company will keep all of their money or scheduled payments if they pass away prematurely. To avoid this uncertainty, you may choose the "period certain" or "installment refund" option at the time of purchase. The period certain guarantees that the insurance company will pay for the selected number of years to you or your beneficiary. The installment refund guarantees that the insurance company will pay the total amount of the single premium to you or your beneficiary.
Can I get my money out if I change my mind?
Mutual Trust offers a twenty day right to examine the policy. The client may return the policy for cancellation within twenty days after delivery. Upon its return, the premium will be refunded in full and without question.
Guaranteed income for life
If you are worried about outliving your assets or supplementing your current income, the Mutual Trust Single Premium Immediate Annuity is the right choice for you. It's an excellent way to provide you with income throughout your retirement years. Contact your Mutual Trust advisor to discuss your options.
See actual Policy descriptions for complete details on Single Premium Immediate Annuities. Not all features are available in all states. See your Mutual Trust representative for current interest rates and details. It is recommended that you contact your tax advisor regarding all tax issues. Neither Mutual Trust nor its representatives offer legal, tax, or accounting advice.
No information here is offered as tax or legal advice. We recommend you discuss with competent advisors/counsel your individual situation.
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