How It Works
Two-Phased Investment
An annuity is a contract issued by an insurance company which enables an investor to set aside money and grow on a tax-deferred basis. When retirement is near, an annuitant can withdraw money as needed, or turn the value of the annuity into a regular income stream that is guaranteed by the issuing insurance company to last a lifetime, regardless of how long the annuitant lives.
- Accumulation Phase
This is the period during which an annuity has the opportunity to grow on a tax-deferred basis which is generally referred to as the accumulation phase. If the owner dies during this phase, the death benefit is paid to the beneficiaries. - Payout (or Income) Phase
This is the period when a contract becomes annuitized. At this point, regular income payments begin which are comprised of the principal paid in, and any earnings accumulated over the years. There are several payout options to choose from each with its own advantages and disadvantages. Keep in mind, the option chosen will be based on annuitant's age (and the age of any joint annuitant) and the policy value at the time of annuitization will determine how much income will be received and how long that income will last.
Guaranteed Lifetime Withdrawal Benefits
Until recently, a guaranteed stream of income was only available when the policy owner chose to annuitize. Today, however insurers offer Guaranteed Lifetime Withdrawal Benefits for an additional charge that guarantee that a certain percentage of a base amount can be withdrawn each year for as long as the policy owner lives. This percentage usually varies depending on the policy owner's age. This allows the policy owner to remain in control of their annuity asset and stay invested in the market while at the same time receiving protection against market downturns.
The Ameritas No-Load Variable Annuity (form 6150) is issued by Ameritas Life Insurance Corp. and underwritten by affiliate Ameritas Investment Corp. As a security, variable annuities includes risk of loss, including principal. Before investing, carefully consider the investment objectives, risks, charges, expenses and other important information about the policy issuer and underlying investment options. This information can be found in the policy and investment option prospectuses, which are available on this web site. Please read the prospectuses carefully before investing or sending money. Not available in NY.
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