Annuities ANNUITIESAs a licensed Independent Insurance Agents, Scott Wells at Family Legacy Concepts (FLC) is able to offer Annuities. He works with a number of different companies to utilize the annuity which is best for the client’s individual circumstances. What differentiates annuities from a number of securities, is that they are issued by insurance companies and can provide for annual lifetime income, according to the owner’s start-time choice.BASICSThe insurance firm issuer of these products provide insurance benefits. These features are guaranteed by the insurance company. Many insurance companies provide for the return of net capital invested, at the death of the purchaser. The fee the owner pays for the benefit is called the Mortality and Expense (M&E) charge.VARIABLE ANNUITIESAnnuities can be compared to IRA account investments, as there are rules about penalties for taking money out before age 59 and ½ years. Annuities can be funded with taxable funds, such as a lump sum from an inheritance or sale of property. For investors in certain circumstances, FLC will set up an IRA Variable Annuity. Discuss your current and projected income situation with your tax accountant or attorney before buying an annuity. As with mutual funds, you should review the Prospectus of the annuity before investing, to review risks and expenses.FIXED ANNUITIESAt Family Legacy Concepts we offer Immediate Fixed Annuities, which provide income for lifetime or fixed periods, commencing within a year. There are other types of fluctuating annuities that limit downside performance through a "floor" or a "buffer" by also limiting the upside, through one or more "caps," "participation rates," and by charging fees. This risk reduction feature is appealing to investors with a modest number of years to accumulate their investment growth. HYBRID ANNUITIES WITH LONG TERM CARE RIDERSAs an alternative to clients' seeking long term care (LTC) insurance, and the robust underwriting it includes, there are LTC riders available in some hybrid annuities. The often-used approach is that the original payment into the annuity, plus growth before the client needs long term care, pays for the first 2 years of care. The insurance company then pays for up to 4 years of care. There is much fine print and details that clients must review before committing to this vehicle for coverage.Competition among insurance companies has increased in recent years, particularly for the lifetime income annuity. Many offerings include unique income riders, crediting, and payout methods, so contact Scott Wells at FLC to determine an appropriate match to your needs and goals.CautionsEach client’s situation is unique, so FLC recommends a deliberate approach in considering annuities. In addition to identifying the features which suit the client well, we consider both the explicit insurance costs and the implicit costs and benefits to the client’s financial plan. Most annuities range in limiting liquidity from 5 to 10 years. Fee-based annuities are entering the marketplace, as well, which do not include this limitation. It is an art, not a science, to right-size and right-time annuities to clients.As interested, use the Have A Question? section of the Contact Page to specify your interest in learning more about Annuity capabilities.