Once you’ve decided to purchase an annuity, you then have to decide what kind of annuities to buy. Keeping in mind your varying circumstances, such as position in life, future financial goals and your age and health, you can decide among three types of annuities to choose the best product that suits your needs.

The first type of annuity is the immediate annuity, a product for those who want to begin receiving payments right away. In return for a lump sum premium, you will receive monthly income for life, or other payment term you may select. You can also choose a different frequency for payments – quarterly or annually. Immediate annuities are perfect for individuals that want to completely fund a longer retirement, because you can’t outlive your payments. The insurance company that issues your immediate annuity determines your payout based on your life expectancy and the amount of your original deposit premium.

If you would like your payout to begin more than 12 months in the future, you should consider deferred annuities. Your deposit premium is locked in for a certain period of time – typically from three to 10 years. During this period you receive a guaranteed interest rate; you may even receive an upfront bonus percentage when you purchase the annuity. Deferred annuities are good buys for those that are looking to add to their retirement savings. Your initial deposit premium, any additional contributions that you make and your interest earnings are not subject to taxation until you begin to remove money from the annuity. When the deferred annuity guarantee period is up, you can convert it into an immediate annuity or you can exchange it into another guaranteed rate deferred annuity.

A third type of annuity is fixed index annuities, also known as equity index annuities. Fixed index annuities are deferred products, but instead of paying a guaranteed interest rate, a fixed index annuity ties its interest earnings to a particular stock market index, such as S&P 500. With this product, you can participate in the stock market’s gains (to a certain percentage, called a cap) with no risk of losing your principal or any previously credited interest earnings. Fixed index annuities have a minimum guaranteed interest rate, so you’ll always come through with a return. Also, your money is never invested directly in the stock market.

AnnuityLibrary.com is your one-stop annuity comparison service that helps you find the best rates for immediate, deferred and fixed index annuities. One call to our Specialists at 1-800-998-4056 will give you a myriad of annuity options. Our Annuity Specialists are trained to help you find the best annuities for your individual needs.