Life Insurance and Annuities

Life Annuity with Period Certain — The company will pay you an income for as long as you live, but if you die before the period certain that you choose, the income will be paid to a survivor you designate until the end of that period. Joint and Survivor Annuity — The company will pay an income to you during your life, and after your death will pay a percentage of that income (50% or 75%, for example) to a survivor you designate during his or her life. Deferred Annuities In recent years, there has been an increasing emphasis on deferred annuities. If you are going to make an informed choice when you buy a deferred annuity, you need to understand which kinds are available. If one type does not seem to fit your needs, find out about the other contracts that are described in this guide. If you need more information than is given here, you should check with a life insurance agent or company, or consult books on life insurance which are available at your public library. Also, the California Department of Insurance (CDI) has a toll-free Hotline listed in this guide to assist you. Choosing the Type of Deferred Annuity There are two basic types of deferred annuities: fixed annuities and variable annuities. There are several variations on them. Fixed Annuities guarantee that your money will accumulate at a minimum specified rate of interest. However, the company will pay you a higher rate of interest if its investment experience is better than the minimum guarantee. Variable Annuities differ from fixed annuities in that contract owners direct the distribution of their money among several different accounts and their accumulated funds reflect the experience of those accounts rather than 14