1. How do FIAs work?
Individuals can make a deposit – or transfer existing retirement funds – into an annuity. An annuity pays a fixed tax-deferred monthly amount when a pre-determined age is reached (the monthly amount is based on actuarial tables). The longer a person decides to wait until they receive payments the higher the monthly payments will be. If an individual lives longer than actuarial tables forecast the payments continue for the person’s lifetime. If the account holder dies before payments begin benefits can go to a designated beneficiary.
A Fixed Indexed Annuity can be linked to a selected index, such as the S&P 500, or other index that expects to deliver significant returns over the long-term, or it can pay a fixed percentage rate.
Some FIAs offer a bonus when an account is opened – it can be as much as 10% – which is added to the principle.
FIAs, along with Social Security and/or pensions, provide guaranteed income during retirement helping policyholders meet essential expenses, and can provide income for vacations, and other leisure activities.
2. How is Long-term Care insurance added to our FIA products?
Long-term care insurance is attached to policies, usually at a rate double the annual annuity payout. For instance if your annual annuity payout is $7170, your annual long-term care benefit will be $14, 340 each year.