There are other categories of fixed or variable annuities:
An immediate annuity allows you to begin receiving payments within one month or up to 12 months from your annuity purchase date, depending on when you want to start this income stream. When purchasing an immediate annuity, you can tailor it to fit your personal needs, which includes choosing a payment option and frequency of the payments (monthly, quarterly, semi-annually or annually).
An indexed annuity earns interest on the potential upward movement of an equity index and feature a minimum interest rate. This rate serves as a “safety valve” by providing growth even when the market performs poorly. These annuities are a popular option for people who want some of the growth potential of a variable annuity, but with less risk. Earnings are linked, in part, to a specific stock index such as the Standard & Poor’s 500™ Composite Stock Index.
Market Value–Adjusted Annuities
A market value–adjusted annuity spreads your premiums over different contract periods. The total value when you withdraw cash is linked to interest rates. If rates fall, your value could be higher. If rates rise, expect the opposite. These annuities have a greater potential to provide higher interest rates than the traditional fixed annuity.
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