Facts about making Annuity sales

Advantages of selling annuities

Making annuity sales are a potential source of excellent profit making and opportunities for sales for the financial advisors of today. You can chose to make annuity sales for a one-time lump-sum charge if you intend to make a large purchase like property or a big investment. This way, you can diversify your assets and receive profits for it while you are carrying out such a process.

Reasons for availing of annuities

• A continual fund: This is among the most popular reasons for availing of annuities. This way people can guarantee that, they receive a continual stream of funds all through their lifetime. People can purchase annuity plans and then sell them to derive profits from them.
• Benefiting inheritors: Purchasing an annuity plan is a way for securing the financial future of beneficiaries. Once the annuitant dies, the beneficiaries can avail of the profits from the annuity plans. This way, their financial future is secured.

• Tax benefits: Making annuity purchases is beneficial form the tax angle as well. The interest received from annuities is not taxable until the money is withdrawn for use. The deferred tax can be paid throughout the duration of the payout period.

Different types of annuities

Based on the kind of deposit paid by the client into the annuity:

• Flexible-premium Annuity - allowing policyholders to deposit additional contributions all through the entire duration of the annuity contract
• Single-premium Annuity - allowing only a single deposit during the contract period

Based on when the payouts begin:

• Deferred Annuity - immediate payment not required, only a future-payment that begins one year after the date on the contract.
• Immediate Annuity - immediate payment to the contract is required, generally within a year from the date on the contract.

Based on the kind of money placed into the annuity contract:

• Non-qualified Annuity - the money placed into the annuity contract is already taxed.
• Qualified Annuity - money placed into annuity contract payments is not taxed.

Based on how the interest is credited into the annuity:

• Indexed Annuity - the interest rate offered is based on an outside index.
• Fixed-interest rate Annuity - the interest rate offered is fixed, with a guarantee of a minimum amount, throughout the period of contract.
• Variable deferred Annuity - the annuity purchaser is provided an option of participating in annuity fund investments.

The parties present in an annuity contract

• Annuity contract owner - this is the person or the legal entity that buys the annuity contract. This person or entity acquiring the annuity also acquires all the rights for the legal contract. He will pay premiums, choose any additional policy features present in the contract, along with the right to surrender or withdraw the annuity that has been purchased. He is also the possessor of the right to designate the beneficiary of the annuity as well as the annuitant.
• Annuitant - this is the person to whom the annuity has been given and the person who holds the annuity contract. In the event of the annuitant's death, the profits from the annuity are given to a designated beneficiary. Annuitant must be a living entity. Legal rights for the contract are not given to him. Owner and annuitant, however, can be the same.
• Beneficiary - this is the person or legal entity who receives the profits from the annuity in the event of the annuitant's death the beneficiary also has no legal rights upon the annuity contract and can claim the proceeds from the annuity only in the event of the annuitant's death