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A fixed annuity is an insurance contract that pays a specific interest rate based on account contributions. You can buy a fixed annuity with a lump sum payment or a series of payments over time.
The earlier you buy your annuity and the longer you defer, the more interest it builds. This allows you to have higher monthly payments when it comes time to cash out your annuity.
How an Annuity Works. The first thing you need to understand about an annuity is that it’s a contract between up to four parties:. Owner: This is the person who buys the annuity. Annuitant: The ...
How an annuity works. When you purchase an annuity, you hand over a lump sum of money or a series of premium payments to an insurance company. In exchange, the insurer promises to pay you a series ...
You may purchase an annuity by depositing a lump sum or by funding the contract over time with a series of premium payments. The annuity will pay out over whatever period is specified in the contract.
When you buy an annuity, you get regular payments for income. You can also opt for a lifetime guaranteed income benefit at an additional cost as an investment option.
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