1. 21750 POINTS
    Jim Winkler
    CEO/Owner, Winkler Financial Group, Houston, Texas
    That is a great question! Annuities are considered to be insurance products, and there is most definitely a contract that defines clearly the stipulations for payments and fees for you and the insurer issuing the annuity. Deferred annuities can be great investments, especially if you can safely put aside that money without need for the allotted deferment period. Be sure to do your suitability study to be sure before buying one, okay? Thanks for asking!
    Answered on April 1, 2015
  2. 1554 POINTS
    Marcy Tooker
    Life & Health Insurance Agent, The Tooker Agency, Riverhead NY
    An annuity, like a life insurance policy, is a contract. Additionally only life insurance companies can issue annuities.

    This sometimes becomes a confusing issue. Many people invest in annuities at their local bank. It is important to understand that the person in the bank is acting as an agent for the insurance company. The bank itself is not a party to the contract, only yourself and the insurance company. It's critical that you not be under the impression that the bank is providing any financial security to your investment, they are not.

    There is also sometimes confusion with 403(b) plans. 403(b) plans are retirement savings vehicles available to many teachers, hospital workers and certain government agencies. When they were first developed the funding vehicle had to be an annuity, and they took on the moniker of TSA (Tax Sheltered Annuity). Today a 403(b) may use a variety of investment vehicles, usually mutual funds or managed money accounts. However many people still use the words TSA, annuity and 403(b) interchangeably. This is technically incorrect and causes a lot of confusion with investors.
    Answered on April 13, 2015
  3. 5082 POINTS
    J Paul Wilson CFP, CHFC
    Certified Financial Planner, JPW Insurance Retirement Investments, Halifax, Nova Scotia, Canada
    In Canada, deferred annuities are considered to be insurance policies.

    Guaranteed Investment Annuities (GIAs) are similar to Guaranted Investment Certificates (GICs) the interest and principle in both are guaranteed. An example of the Guaranteed Investment Annuity's "insurance element" is the annuity or monthly income.

    Guaranteed Investment Funds (GIFs), are segregated funds and are similiar to mutual funds.The funds invested in both are at risk. However, Guaranteed Investment Funds, in addition to the annuity or income element offer maturity and death guarantees of 75% to 100%.

    These investment vehicles offer benefits that could prove to be valuable. For more information please visit JPW.ca or contact me via this web site.
    Answered on May 3, 2015
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