Annuities offer a unique way to save for retirement. They provide a steady stream of income, which can be helpful during retirement. However, there are different types of annuities, and each has its benefits and drawbacks. In this guide, we will discuss the type of annuity that has a cash value. This type of annuity is popular among retirees because it allows them to access their funds if needed.
Which Type Of Annuity Has A Cash Value?
An annuity with a cash value is called a “deferred annuity.” A deferred annuity is an investment product that allows an investor to make periodic payments or a lump sum payment to an insurance company in exchange for future income payments. The payments can be made over a specified period of time, such as several years, or they can be made over the investor’s lifetime.
Deferred Annuities
Deferred annuities have a cash value because they accumulate a balance the investor can access before the income payments begin. This cash value is typically referred to as the “accumulation value” or “surrender value” of the annuity.
The accumulation value of a deferred annuity is the amount the investor has paid into the annuity plus any earnings accumulated on those payments. The surrender value is the amount the investor would receive if they cancel the annuity before the income payments begin.
Deferred annuities are often used to save for retirement or provide a source of income during retirement. They can be either fixed or variable, and they can be structured as either immediate or deferred.
Next Steps
The cash value annuity is a popular choice for retirees because it offers the stability of an income stream while still providing access to funds if needed. Contact us today if you are interested in learning more about this type of annuity or getting a quote. Our team would be happy to answer any questions and help you decide if a cash-value annuity is right for you.
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