Buy Annuities in CA
Annuities are designed to help you secure your retirement years. They are not accessible until you reach the age of 59 1/2 unless you pay a 10% tax penalty. Additionally, some insurance companies will penalize you for early withdrawal even if you are at a legal age, depending on what stage your contract is in. If you have already started the annuitization process, for example, and then want to withdraw the rest of your cash, you may be penalized with a surrender charge.
There are a number of different types of annuities, but they boil down into a few main categories. There are lump sum annuities where you make one payment and then that gathers interest. Or, you can make periodic payments into the policy. There are also immediate annuities where your disbursements begin in less than a year, or deferred annuities where your money is held for a year or longer before disbursements begin. There are also various riders that can be added on as far as life insurance is concerned if you want to ensure that your beneficiaries receive an inheritance. If you are unsure of which of these is best, please speak with a licensed insurance agent before signing anything.
Finally, there are fixed rate annuities and variable annuities. Fixed rates promise you a certain percentage return year after year, whereas variable rates are hinged upon what the market does. For those that will have their money in the market for 15 years or longer, variables have historically been the superior choice. Shorter terms are better off with fixed rates, especially if that money is vital to maintaining a lifestyle. Typically, older individuals benefit the most from fixed annuities, but not always. This will guarantee that your money is growing even if the market goes sour for a few years. Equity indexed annuities also exist. They are very similar to variable annuities, but mirror a major consumer index, like the S&P 500 or the Dow Jones Industrial Average. If your goal is to keep your money growing at the same rate as inflation, then this can be a strong product for you.
If you have questions about what type of annuity is best for you, contact a professionally licensed agent today to go over your options.
To buy an annuity in California, you need to purchase a policy from a State of California licensed agent. We have attempted to make this a little easier for you with this site. California, like other states, has slightly different insurance laws, and going through a reputable agent is the best way to ensure that you are getting the best policy for your current and future needs.
In California, there is a 30-day free look period. This is a window of time that allows you to sign a contract and keep it for 30 days or less before deciding that you want to cancel your side of the contract. This will free you from paying any sort of surrender fee or penalty and your money will be returned to you in whole. It’s a safety net to ensure that you are not signing a policy under duress. If you have second thoughts, it’s during this time that may cancel your contract. California has the most generous free look period of any state (30 days), so even if a couple weeks go by and you are unhappy with your purchase, you can still back out of it without penalty.
Finally, be aware that California law has come down strictly on insurance agents in recent years. There are tough guidelines in place meant to keep those aged 60 and older safe from fraudulent insurance scams or misleading sales reps. For example, if an agent is going to come to your home to pitch a product, they must provide written notice in 14-point type or larger before their arrival. This notice must inform the elderly person of their insurance license information, any other guests that will be coming, and encourage the person to invite family members or an attorney to the meeting. This is all designed to keep people safer and avoid the selling of needless policies.
Annuities have a nice blend of life insurance properties and investment qualities built into them. They are a life insurance product, but they have many of the features that we look for in retirement accounts, too. The biggest benefit to an annuity is that it provides a sort of “old age insurance.” Some people do choose to setup safeguards that will protect their beneficiaries if they pass away before their money is gone, and this is where the life insurance aspect becomes important. However, you will typically never see as much return from an annuity as you will see in a life insurance policy, so this is not a replacement for life insurance. It is to be used primarily for the initial owner of the policy to guarantee a source of income throughout their lives, and not as something solely designed for heirs. In other words, it will benefit those that want to ensure that they stand as little risk of running out of money during their lifetimes as possible. When you add Social Security and other retirement accounts into the mix, the odds of being financially secure throughout your lifetime go up dramatically. After all, that is the point of purchasing an annuity.
When you purchase an annuity, be sure to go over your payment and beneficiary options before you sign a contract. You have a goal in mind, and you have other that you care about. An annuity should be designed to help you protect yourself and the people that you love.
If you are looking for an annuity in California, and you still have questions, there are some next steps to take. You can contact us through this site and get questions answered by an insurance sales rep, or you can contact the California Department of Insurance helpline directly at 1 (800) 927-HELP. Either will be beneficial to you. Ideally, you already have a set of goals in mind for your retirement. The next step is finding the right annuity to help you meet and even surpass those goals.