Annuities, What Seniors Need to Know

6 Deferred Annuities Deferred annuities are long-term investments. They have two periods: • The accumulation period is when your money grows. It can last for over 10 years. • The amortization period is when you get income payments. It can last as long as your life, and even the life of your beneficiary. Watch out for surrender charges during the accumulation period! If you need your money during the accumulation period, you usually have to pay a penalty called a surrender charge. You can’t take any money out in the first year. After that, you may be able to take out some money without a penalty. If you take more, the surrender charges can be high. You may end up with less money than you started with. What if I need access to my money? If you think you will need access to your money during the accumulation period, do not get a deferred annuity. However, when this period ends, you may be able to take out your money. This is called cashing out. What if I die before my income payments start? This is an important question for estate planning. Your beneficiary may want to cash in the annuity. Ask your agent if your beneficiary would have to pay a surrender charge. See page 8. Learn more : Order or view the free brochure Life Insurance and Annuities from the California Department of Insurance. Call 1-800-927-4357 or visit www.insurance.ca.gov. Annuity contracts for seniors must provide clear, easy-to-find information on the surrender charge and the period when you have to pay it.