An annuity may be classified as immediate, or deferred. An immediate annuity is purchased with a single premium payment and begins income payments at one pay interval (monthly, quarterly, semi-annually or annually) within one year of the purchase date. A deferred annuity may be purchased with periodic premium payments, or a single premium payment, and benefits are distributed at a future time selected by the policyowner, which may include a lump sum payment.

Annuities can also be defined according to their investment configuration, which affects the income benefits they pay. They may be classified as fixed, variable, or indexed annuities.

A fixed annuity guarantees the principle investment and also provides an interest rate that is guaranteed by the contract. The company may pay a higher or current interest rate, but it will never fall below the guaranteed rate. The interest grows on a tax-deferred basis until annuity payments begin or the accumulated fund is otherwise distributed. Premium payments to a fixed annuity may be made in a single lump sum, or in periodic payments.

A variable annuity provides a choice of investment portfolios similar to mutual funds and some may include a fixed interest account. Premiums are usually paid in periodic payments (but can be a single lump sum) and may be allocated to one or more of the investment portfolios, or to the fixed interest rate account. Premiums allocated to the investment options are held in a separate account, as opposed to the fixed interest account where funds are held in the general account of the insurer.

Los valores de acumulación de las carteras de inversión se expresan en dólares por unidad, y el valor de cada unidad puede subir o bajar dependiendo del desempeño de las inversiones subyacentes. El dueño del contrato tiene la oportunidad de tener ganancias basadas en el mercado, pero también enfrenta los riesgos relacionados con las bajas en el mercado.

La Comisión de Valores y Bolsas reconoce a las anualidades variables como una inversión. Los agentes que venden anualidades variables deben tener licencia y estar registrados en la Autoridad Reguladora del Sector Financiero (FINRA), además de tener una licencia de seguro de vida del estado. El agente de seguros debe proporcionarle un resumen, o un folleto informativo con un resumen de la póliza, antes o al momento de entregar la póliza.

An indexed annuity (often referred to as fixed indexed annuities or equity indexed annuities) are deferred annuities that earn interest or provide benefits that are linked to an external equity index, such as Standard and Poor’s 500 Composite Stock Price Index. These annuities pay interest by tracking the performance of the index and paying an interest rate based on the gains in the index. An indexed annuity pays interest based only on the upward movement of a market index - losses in the index are ignored. This means there is no market risk with an indexed annuity.

Cuando el titular de la anualidad decide anualizar los valores de su anualidad, tiene muchas opciones de pago, entre ellas:

Lump Sum - the balance of the annuity account is paid in a lump sum.

Straight Life Income - pays the annuitant a guaranteed income for the annuitant’s lifetime. Upon death of the annuitant no further payments are made.

Life Annuity with Period Certain - guaranteed to pay the annuitant for life, or for a certain period of time, whichever is longer. Period Certain terms are usually 10, 15, or 20 years.

Joint and Full Survivor - provides payment of the annuity to two people. If either of them dies payments continue to the survivor for life. Similar arrangements are Joint and Two Thirds Survivor, and Joint and One Half Survivor.

Cash Refund - provides for a guaranteed income to the annuitant for life. If the annuitant dies before the principal is depleted, the balance is paid to the beneficiary in a single lump sum.

Installment Refund - the same as a Cash Refund except it provides for the funds remaining at the annuitant’s death to be paid to the beneficiary in the form of continued annuity payments - not as a single lump sum.

El impuesto sobre la renta de las anualidades no calificadas se aplaza, lo que significa que no se aplican impuestos al interés ganado si el dinero permanece invertido en la anualidad. Durante la anualización o el período de pago, una parte de los pagos que reciba se reputará como reintegro de sus primas y la otra parte se reputará como intereses ganados. Deberá pagar impuestos sobre la parte reputada como interés al retirar el dinero. Cuando fallezca, sus beneficiarios adeudarán impuestos sobre la renta de las indemnizaciones por fallecimiento que reciban de la anualidad que represente intereses ganados.

Se difiere el impuesto sobre la renta de anualidades calificadas (es decir, IRA tradicional), hasta que los retiros se efectúen sobre la anualidad. Se aplican impuestos a todas las ganancias de una anualidad calificada. No hay distinción entre capital e interés. Cuando fallezca, sus beneficiarios podrían adeudar impuestos sobre la renta de su parte de la anualidad.

Se difiere el impuesto sobre la renta de un Roth IRA calificado y no se aplican impuestos sobre las ganancias al titular de la anualidad, al beneficiario y a todos los beneficiarios al efectuar retiros.

Las anualidades podrán también utilizarse para financiar ciertos planes de beneficios para jubilaciones de empleados que diferirán la aplicación de impuestos sobre las contribuciones del plan y sobre el interés o la renta invertida. Un IRA tradicional y un Roth IRA también pueden financiarse con anualidades. Debería consultar con un asesor tributario profesional para determinar si esas opciones son adecuadas para usted.

El intercambio 1035 hace referencia al artículo 1035 del Código Interno de Ingresos, que establece que el valor de una póliza de un seguro de vida o de una anualidad existente se pueden traspasar a una anualidad sin que se apliquen impuestos a la renta de las ganancias. Su compañía y su agente de seguros conocen los formularios y realizarán el intercambio 1035. Si se devuelve una anualidad existente y usted o el banco recibe el cheque y luego se adquiere una nueva anualidad, eso implicará la recepción implícita del valor de la anualidad, la que estará sujeta a la aplicación de impuestos.

Funds withdrawn from a deferred annuity before age 59 ½ may be subject to a 10% income tax penalty.

La mayoría de las anualidades permiten el retiro anual de un porcentaje del valor acumulado (por lo general el 10%), que no estará sujeto a la penalidad por cancelación, según las disposiciones del contrato.

Al sustituir una anualidad existente u otra inversión, deberá tener en cuenta todas las ventajas y desventajas de la sustitución, lo que incluye, a título enunciativo: los costos por cancelación, las tasas de interés, los anexos, los honorarios de administración, los costos administrativos y otros cargos. Solicítele a su agente el detalle de los cargos o costos relacionados con la compra de la anualidad.

Si el agente le recomienda comprar, sustituir o intercambiar una anualidad, deberá completar un cuestionario de idoneidad antes de celebrar un contrato. El formulario con el cuestionario de idoneidad deberá estar firmado por el solicitante y el agente. Una copia del formulario se entregará al solicitante antes de la fecha de celebración del contrato.

Insurance companies selling annuities must allow a “free-look” period during which time you may return the policy for a refund. Fixed annuities must provide an unconditional refund (including any contract fees or charges), for at least 21 days from the date of policy delivery. A 21-day “free look” is also required for variable or market value annuities. The refund is equal to the cash surrender value provided in the contract, plus any fees or charges deducted from the premiums or imposed by the contract, or a refund of all premiums paid. Please review your contract again after it is delivered and ask your agent to clarify any provisions or terms you do not understand.

La portada de la anualidad deberá incluir la siguiente información, si corresponde, en letra negrita y al menos 12 tipo de punto:

1. “Please be aware that the purchase of an annuity contract is a long-term commitment and may restrict access to your money.”
2. “It is important that you understand how the bonus feature of your contract works. Please refer to your contract for further details.”
3. The interest rate applied to your contract may be subject to change periodically and may increase or decrease, subject to certain interest rate guarantees described in your contract.”
4. A Prospectus and Contract Summary (for variable annuities) and a Buyer’s Guide are required to be given to you.”

La portada también debe incluir la información de contacto de la compañía emisora y el agente de venta, y la línea gratuita de ayuda del Departamento de Servicios Financieros.

• ¿Esta anualidad cumple con mis objetivos financieros?
• ¿Qué es la tasa de interés mínima garantizada?
• ¿La anualidad incluye anexos? ¿Sé cómo funcionan?
• Pregúntele a su agente si existen cargos adicionales asociados con su anualidad.
• ¿Se incluyen cargos adicionales en mi prima?
• ¿Cuáles son los cargos por cancelación o multas si deseo finalizar mi contrato antes de tiempo y retirar todo mi dinero?
• ¿Durante cuántos años estaré sujeto a cargos por cancelación?
• ¿Puedo realizar un retiro parcial sin tener que pagar cargos o multas ni perder el interés devengado?
• ¿Estoy exento de los cargos por retiro de mi anualidad si estoy confinado en un hogar de ancianos o si se me diagnosticó una enfermedad terminal?
• ¿Cuáles son mis opciones de ingreso cuando mi anualidad llega al término de su período de rescate?

Annuitant - the person upon whose life the annuity contract is payable. The annuitant may or may not be the owner of the annuity.

Accumulation Period - the period between the time a premium or premium payments are made, and income payments start.

Accumulation Units - pertains to variable annuity contracts. Premiums paid to the company, less a deduction for any expenses, are converted to accumulation units and credited to the individual’s account. The value of each unit purchased will go up or down with the market.

Annuity Units - before a variable annuity can be paid out the accumulation units are converted to annuity units. Annuity units are the basic measure and method by which a purchaser’s annuity income is determined. Once the annuitization or payout period begins, the number of annuity units does not change. However, the value of the annuity units will go up or down with the market.

Annuitization or Income Date - a date or age named in the annuity at which time the company begins making annuity payments.

Annuitization Period - the period of time periodic income payments are made.

Beneficiary - the person (named by the policy owner) entitled to receive benefits, if any, upon the death of the annuitant.

Bonus Annuity - pays a premium bonus amount when you buy the annuity or pay a premium, or an interest bonus added to the interest your annuity would normally earn. The bonus or increased interest is usually contingent on a policy condition such as remaining in force for a certain number of years, or annuitization (setting up periodic income payments). Please ask your agent to explain any conditions that must be satisfied to receive the bonus.

Buyer’s Guide - a document prepared by the National Association of Insurance Commissioners that provides information about annuities. The insurer is required to provide a buyer’s guide to each prospective purchaser for fixed and indexed annuities. For variable annuities, the insurer is required to provide a buyer’s guide (if available) or a policy summary, or a prospectus containing a policy summary.

Churning - Using the policy values in an existing life insurance or annuity policy to purchase another life or annuity policy with the same insurer for the primary purpose of generating additional commissions, without a reasonable assumption that the new policy will be much better.

Charitable Gift Annuity - the annuity contract between the insurer, the annuity owner, and the charity. A charitable gift annuity is intended to serve as a gift to a charity rather than income. The policy owner agrees to donate cash, stock, or other assets to a charity. In return, the owner receives a fixed payment (annuity) for life, plus tax benefits. Charitable annuities are not protected by FLHIGA and the donation is irreversible.

Longevity Annuity - also known as a “paid-up” annuity. This type of annuity provides protection against outliving your money late in life. They are usually purchased as a supplemental retirement investment. Once the payout begins, the annuity provides a regular amount of income for the rest of your life. If you die before you begin to receive payments, your heirs would not receive any benefits.

Maturity Date - the date on which the company must repay the principal. This term is most often used with life insurance policies and refers to the date the guaranteed cash value of the policy equals the face amount.

Policyowner - the person or entity that has the right to make changes in the contract. These include the right to surrender the policy and a change the beneficiary. The policy owner may or may not be the annuitant.

Prospectus - this document is prepared by the insurance company and reviewed by the Securities and Exchange Commission. It contains information about the purpose of the annuity, the separate account, the company’s investments and investment strategies. Purchasers of a variable annuity are required to receive a prospectus containing a policy summary, and entitled to a buyer’s guide.

Rider - Annuities may contain riders which add benefits to the contract, usually for an additional cost. An example may be a guaranteed income rider which guarantees a lifetime income regardless of the accumulated value of the annuity.

Twisting - is the practice of inducing a policy owner with one company to lapse, forfeit, or surrender a life or annuity policy for the purpose of taking out a policy in another company.

Surrender Charge - most annuity contracts charge a surrender penalty for withdrawals or surrenders that exceed the penalty free amount available, made during the early years of the contract. Usually the surrender penalty is a percentage of the amount withdrawn. The percentage declines each year until it reaches zero. Your annuity policy will contain a surrender schedule.

You should buy your annuity from an insurance company that is financially sound. There are various ways you can research an insurance company’s financial strength, such as visiting the insurance company’s website or asking your annuity salesperson for more information. You can also review a company’s financial strength rating from an independent rating agency such as A.M. Best Company, Standard and Poor’s Corporation, Moody’s Investor Service, and Fitch Ratings.

Si el titular de la anualidad es residente de la Florida y la compañía de seguros con licencia para vender anualidades en la Florida se declara insolvente, la Florida Life & Health Insurance Guaranty Association (FLHIGA) garantizará una anualidad fija de hasta un monto total de $250,000. Si el contrato fue anualizado antes de la liquidación de la compañía, la garantía máxima será de $300,000.

La Guaranty Association solo cubre a los titulares de pólizas y certificados que fueran residentes legales de la Florida en la fecha en la que la aseguradora se declaró insolvente y se liquidó. Si era residente de la Florida es esa fecha, puede estar cubierto por la FLHIGA, incluso si después se mudó a otro estado.

La FLHIGA cubre partes de una anualidad variable que están garantizadas por la aseguradora (cuentas de intereses fijos). Sin embargo, la FLAHIGA no cubre una anualidad variable que no tenga garantía de la aseguradora (opciones de cartera de inversiones subyacentes).

Visite Buscar Titulares de Licencias to verify that your agent is licensed.

Los agentes pueden tener designaciones profesionales que indiquen que han recibido educación o capacitación adicional en áreas como seguro de vida, anualidades, planificación de bienes y beneficios para adultos mayores. Algunos de los más comunes son: Suscriptor Autorizado para Seguros de Vida (CLU), Consultor Financiero Autorizado (ChFC), FLMI (Miembro del Instituto de Administración de Vida), LUTCF (Miembro del Consejo de Capacitación de Suscripción de Seguros de Vida) y CFP (Planificador Financiero Certificado).

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• FLORIDA INSURANCE CONSUMER HELPLINE
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