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What is an Annuity?

An annuity is a type of policy issued by an insurance company designed to accept and grow funds, and upon annuitization, create a stream of income or payments. The money you pay in can be either a lump sum or a number of payments. These contributions generally earn a rate of return, generally tax-deferred.

Annuities are offered by State Farm Life Insurance Company (Not licensed in MA, NY or WI) or State Farm Life and Accident Assurance Company (Residents of NY and WI only).


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Types of Annuities

There are two main ways to categorize annuities: immediate vs. deferred annuities and fixed vs. variable annuities. The immediate vs. deferred category has to do with when your income payout begins. The fixed vs. variable category has to do with how your contributions are invested.

Immediate Annuity vs. Deferred Annuity

日本特黄无码毛片在线看|中文字幕无码亚洲视频With an Immediate Annuity, your money provides guaranteed payments to you that begin soon after you make your initial payment. Depending on the tax-qualified or non-tax-qualified status of your annuity, a portion or the entire payment can be included in your taxable income. The owner can elect to receive guaranteed payments for life, or elect payments to be made over a specified length of time (period certain).

With a deferred annuity, your income payments are usually put off for a period of time allowing the money you've contributed to earn interest generally tax-deferred. You choose when you want to start receiving income payments — typically, upon retirement.

Fixed Annuity vs. Variable Annuity

日本特黄无码毛片在线看|中文字幕无码亚洲视频With a Fixed Annuity, the insurance company places money in high quality fixed-rate investments such as bonds, where the insurance company will earn a fixed interest rate for a certain period of time. For most fixed annuities, the insurance company guarantees a minimum interest rate that you will earn, often for a specified period of time. With a Fixed Annuity, the insurance company is taking the investment risk.

With a Variable Annuity, money is placed in market-based investments. This may include stocks, bonds, mutual funds, or money markets. You may have the option to move the money around among the different investments. In addition, the rate of return can vary based on the performance of the investments. With a Variable Annuity, the risk is taken by the annuitant, rather than by the insurance company.

Tax Advantages

日本特黄无码毛片在线看|中文字幕无码亚洲视频Deferred annuities can also be a good way to help increase your retirement savings. The tax-deferral and compounding of interest provided by an annuity can help it to grow larger than an equal amount placed in a taxable account. Gains will be taxed as ordinary income once the money is withdrawn. Annuities can also be used to fund traditional IRAs, Roth IRAs, and Simplified Employee Pension Plans. When an annuity is used to fund a tax qualified retirement plan or IRA, the tax deferral is provided by the retirement plan or IRA and not the annuity. You should contact your attorney or tax adviser for more complete information.

Plan Type
Tax-Qualified Plans
Non-Tax Qualified Plans
Plan Name Business Retirement Plans
Traditional IRAs
Roth IRA
Tax-Deductible Contributions Yes No No
W-2 Earned Income Required Yes Yes No
Contribution Age Limit Yes, age 70 for earned income. No No
Distributions Taxable Yes No, for a qualified distribution. Only the interest earned is taxable;
you do not pay tax on the principle.

More about Annuities

The death benefit is the value of the policy on the date of the annuitant's death. Some variable products have death benefit guarantees that provide protection if death occurs during a market downturn. For example, the death benefit could be the greater of the amount paid in or the account value. If you die before payouts begin, your beneficiary will receive the current value of the annuity. Once you've begun receiving payments, the amounts paid to the beneficiary will depend on the payout option you originally selected.

A surrender charge is a fee owed upon a premature withdrawal or "surrender" from an annuity. Surrender charges decline to zero over time and are a percentage of the accumulation value withdrawn. State Farm® waives surrender charges in certain situations (see Annuities Mythbusters below), and not every annuity has surrender charges.

日本特黄无码毛片在线看|中文字幕无码亚洲视频Annuities are often mentioned in the same conversation as life insurance because most annuity contracts are written by life insurance companies. However, life insurance is intended to meet the needs of the beneficiaries after the death of the policyholder. With annuities, the intention is to provide additional income to policyholders during their retirement years.

Annuities Mythbusters

日本特黄无码毛片在线看|中文字幕无码亚洲视频Annuities are designed to stay in-force over a period of time but sometimes the unforeseen happens. Many annuities will waive surrender charges upon death, terminal illness, or nursing home confinement.

Federal tax rules allow you to transfer an annuity without being taxed. If the transfer qualifies as a rollover or 1035 exchange, it will be tax-free. You should always talk to your tax advisor first. Even though funds can be transferred tax-free in these situations, surrender charges may still apply.

日本特黄无码毛片在线看|中文字幕无码亚洲视频Not necessarily. Deferred annuities may also make sense for other people who are looking for an additional way to save money for retirement, even when it is a few years down the road.


Before investing, consider the funds' investment objectives, risks, charges and expenses. Contact State Farm VP Management Corp (800-447-0740) for a prospectus or summary prospectus containing this and other information. Read it carefully.

Investing involves risk, including potential for loss.

Neither State Farm® nor its agents provide tax or legal advice.

State Farm VP Management Corp. is a separate entity from those State Farm®日本特黄无码毛片在线看|中文字幕无码亚洲视频 entities which provide banking and insurance products.

Variable annuities are long-term investments designed for retirement purposes.

日本特黄无码毛片在线看|中文字幕无码亚洲视频 Variable annuities have fees and charges that include mortality and expense, administrative fees, fund expenses and may include surrender charge, transfer processing fee and additional deposit rider charge.

Bonds are subject to interest rate risk and may decline in value due to an increase in interest rates.

You could lose money by investing in the Money Market Fund. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the Fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation ("FDIC") or any other government agency. The Fund's sponsor has no legal obligation to provide financial support to the Fund, and you should not expect that the sponsor will provide financial support to the Fund at any time.

日本特黄无码毛片在线看|中文字幕无码亚洲视频 Guarantees are based on the claims-paying ability of the issuing State Farm life insurance company.

日本特黄无码毛片在线看|中文字幕无码亚洲视频 In a tax-qualified retirement plan, federal income tax deferral treatment is provided by the plan. No additional tax deferral treatment is provided by the annuity.

Withdrawals and distributions of taxable amounts are subject to ordinary income tax and, if made prior to age 59 1/2, may be subject to an additional 10% federal income tax penalty. Dividends and gain from other investments may be taxed at capital gains tax rates (which are usually lower than ordinary income tax rates). The gain portion of variable annuity death benefit proceeds is taxable as ordinary income.

Insurance policies and/or associated riders and features may not be available in all states, and policy terms and conditions may vary by state.

Policy Series ICC14 15048, ICC14 15098, 15048, 15098, A15048, and A15098.


Securities are not FDIC insured, are not bank guaranteed and are subject to investment risk, including possible loss of principal.

Issued by:
State Farm Life Insurance Company (Not licensed in MA, NY, or WI)
State Farm Life and Accident Assurance Company (Licensed in NY and WI)
日本特黄无码毛片在线看|中文字幕无码亚洲视频 Home Office, Bloomington, Illinois

日本特黄无码毛片在线看|中文字幕无码亚洲视频 Each insurer is financially responsible for its own products.