Variable Annuity Investments
About Variable Annuities
Variable Annuities can be powerful investment tools. They are contracts between you, the investor, and an insurance company, and are one of the few remaining investments vehicles left that combine tax-deferral and opportunities for growth.
As you prepare for the future......
The most common reason people choose variable annuities is to accumulate dollars for use at a future date, typically for retirement. No doubt many of you have realized that Social Security, IRA's, and individual pension plans need to be supplemented.
Variable annuities are long term investment opportunities that combine tax advantages with the benefits of investment funds and insurance.
The investor chooses from a selection of managed investment portfolios consisting of stocks, bonds, global investments, and guaranteed fixed rate accounts.
Variable annuities are easily purchased through the brokerage services available at your nearest Ulster Savings Bank branch location.
Investors should consider the investment objectives, risks, charges and expenses of the investment company carefully before investing. The prospectus contains this and other information about the investment company. A prospectus is available from an Investment Executive. Please read the prospectus carefully before investing.
Variable Annuities Offer You These Exciting Advantages:
Professional Management
Your funds are placed in a separate account, established and maintained apart from the insurance company's general investment portfolio. So, the return on your investment does not depend on the performance of the insurance company's own portfolio.
Furthermore, your money is being managed by professionals in the field of money management and with proven performance records. They monitor the securities in each portfolio on a daily basis and then, decide on those that show the best potential based on historically strong performance. However, please remember that past performance is no guarantee of future results.
Tax-Deferred Accumulation
You have a choice of when to pay taxes. All of your dividends, interest, and capital gains are automatically re-invested and compounded tax- deferred until you withdraw your money. The taxation is deferred to a later date when, presumably, you will be in a lower tax bracket. Thus, you have the potential for accumulating a larger nest egg because your money has earned interest three ways:
- Your principal earned interest
- Your interest earned interest
- The money that you would have paid in taxes earned interest
Investment Choices
You are able to choose from a variety of investment options, including Growth, Income, Balanced, Global, Money Market, or a Fixed Rate account.
Diversification
Whether you are an aggressive, middle-of-the-road, or conservative investor, you can choose a mix of investments options based on your investment objectives and you current needs. Many investors diversify their contributions among several different types offered within the annuity. In some cases, this can provide a hedge against market fluctuations within the annuity. In some cases, this can provide a hedge against market fluctuations within any one asset.
Potential Hedge on Inflation
The investment fund portfolios in a variable annuity have the potential to perform at a competitive rate keeping you ahead of inflation. You take on more risk when you invest in a variable annuity; however, you are also in a position to earn potentially higher rewards.
Since variable annuities are not financial institution deposits, investment return and principal value will fluctuate so that the value of the surrendered contract may be more or less than the original investment. Thus investment risk would also include the possible loss of principal.
Guaranteed Death Benefit *
Your family is protected in the event of your death, regardless of market conditions. They are assured of receiving, at the minimum, the original principal investment or the account's value, whichever is greater.
*Guarantees are based on the claims paying ability of the issuer.
Avoidance of Probate
The variable annuity proceeds pass directly to your beneficiaries without the delay and the expense of probate. For a comprehensive review of your personal situation, always consult with a tax or legal advisor. Neither PRIMEVEST, nor its representatives may give legal or tax advice.
Guaranteed Income for Life
You choose how to receive income payments: in a lump-sum, at regular intervals for a set period of time, or as a guaranteed income stream for the rest of your life, regardless of how long you live!
As you might expect, the strength of any guaranteed income stream depends upon the strength of the company standing behind it and based on the claims paying ability of the issuer.
Flexible, Tax-Free Switching
You may move your investment allocation from one portfolio to another at any time, without suffering a tax penalty or paying an additional fee. Typically, an investor would experience a gain or a loss in a year where an investment is sold and another is purchased. You may reallocate your investment at any time, as you objectives change. This feature is especially important for those investors 40-50 years of age who, in addition to retirement, face the more immediate challenges of servicing a mortgage or supporting aging parents.
Reasonable Liquidity
While a variable annuity is a long-term investment opportunity, you always have access to a portion of your money. Most variable annuity programs allow you to with draw 10% of the account value annually or 100% of earnings. However, when you invest in a variable annuity, you usually commit your investment to a specified amount of time. Therefore, there may be early withdrawal charges if you take out too much money, too soon. In addition, shares are always redeemed at the current net asset value, which may be more or less than their original cost. Normally, if earnings are taken before age 59½, there will be a 10% Federal Government penalty assessed to the earnings.
No Front- End Sales Charge
Your money goes to work immediately. Variable annuities typically have mortality and expense charges of around 1%-2%. These maintenance charges are withdrawn from your account daily; Variable annuities carry insurance related fees and expenses that may not apply to other types of investment vehicles. Talk to an Investment Executive today for more information.
No Insurance Evaluation
Since your variable annuity is an investment vehicle; you may purchase it regardless of the state of your health. There is no need to worry about any "pre-existing condition", and you cannot be denied the opportunity to buy.
Qualified Plan Funding
You may also use a variable annuity for an IRA, SEP, TSA, KEOGH, etc, in which case, the initial deposit is minimal. Although qualified plans already offer tax-deferral, variable annuities may provide added product features. Variable annuities will not provide any additional tax benefits when held in a tax-qualified account.
Easy to Open / Relatively Affordable
You'll discover that a variable annuity is easy to open and very affordable, often requiring only a $5,000.00 minimum for non-qualified money and $2,000 minimum for qualified money. Additional contributions of as little as $50 a month can be made by check or by electronic transfer.
Investors should consider the investment objectives, risks, charges and expenses of the investment company carefully before investing. The prospectus contains this and other information about the investment company. A prospectus is available from an Investment Executive . Please read the prospectus carefully before investing.
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PRIMEVEST Financial Services, Inc. is an independent registered broker/dealer and registered investment adviser. Member SIPC/FINRA. Securities and insurance products offered by PRIMEVEST: *Not FDIC insured * May go down in value * Not financial institution guaranteed * Not a deposit * Not insured by any federal government agency. FINRA Registered Branch: 180 Schwenk Drive, Kingston, N.Y. 12401
For a comprehensive review of your personal situation, always consult with a tax or legal advisor. Neither PRIMEVEST, nor any of its representatives may give legal or tax advice.
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Investment Executives are registered to conduct securities business and licensed to conduct insurance business in limited states. Response to, or contact with residents of other states will only be made upon compliance with applicable licensing and registration requirements. The information in this website is for U.S. residents only and does not constitute an offer to sell, or a solicitation of an offer to purchase brokerage services to persons outside of the United States.
