What is a Split Annuity?
A Split Annuity is a combination of an Immediate Annuity and a Deferred Fixed Annuity that provides a fixed income stream while guaranteeing that your principle is returned at the end of the annuity duration.
Immedite Annuity portion
The Immediate Annuity portion will pay you a monthly or annual income for a fixed period of time. It is a stable and guaranteed income that cannot be effected by outside influences like interest rate changes or stock market fluctuation. Depending on where the money being used to fund this annuity comes from, a large portion of this income may not even be subject to income tax.
Deferred Fixed Annuity portion
The Deferred Fixed Annuity portion will provide tax-deferred growth and play the role of growth and preservation of your original principal. This annuity is usually purchased for the same length of time as that of the immediate annuity.
How does a Split Annuity work?
The way the Split annuity concept works is simple. Generally, you take a pre-determined amount of your total investment and put it into a Deferred Fixed Annuity. This will provide a tax-deferred interest rate of return for the desired length of time which is guaranteed to grow to your original deposit. The remaining amount will be placed in an Immediate Annuity which will provide a monthly or annual guaranteed income payment . This income payment is not subject to any outside influences such as interest rate changes or stock market fluctuations. Hence, at the end of the selected term, you would have received income for the entire benefit period and also have preserved the entire amount of your initial principal without any risk at all!!
Why should I choose a Split Annuity?
Choose a Split Annuity to guarantee principal while also providing a guarantee of income payments. It also preserves your legacy to pass on to your beneficiaries and allows you to make the best of current rates available and re-evaluate your situation based on your needs after the guarantee period has passed. If an owner of a Split Annuity were to die unexpectedly, the payments and the full cash value will be passed on to their designated beneficiary free of probate. Please click below to have a qualified, Independent representative contact you for a free consultation to see if a Split Annuity is right for you.
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