How do annuity payments work?

When you purchase an annuity contract, you make a lump-sum payment or a series of payments to an insurance company or financial institution. This payment, known as the premium, is invested by the annuity company. During the accumulation phase, your premium grows on a tax-deferred basis.

How do annuity premiums work?

This payment, known as the premium, is invested by the annuity company. During the accumulation phase, your premium grows on a tax-deferred basis. The annuity provider invests your money, and the growth of your annuity value depends on the performance of these underlying investments.

What are the benefits of an annuity?

An annuity can provide you with a predictable stream of income in retirement. The primary benefits of an annuity include: Predictable payments. Annuity income payments may be guaranteed for a set period of time or until the end of your life, or the life of your spouse or another beneficiary. Tax-deferred growth.