Ohio National Financial Services, Unit XII: Securities and Variable Products

Annuities are the only investment vehicle that can offer both tax-deferred accumulation and a guaranteed income that investors cannot outlive. In addition, most variable annuities have a specified death benefit that an investor's beneficiary will receive if the investor passes away. To maximize the tax deferral benefits over the costs of the variable annuity, an investor needs to hold it for the long-term to meet long-term goals, such as retirement. Because variable annuities are complex, investors need to consider all facets carefully.

Some Variable Annuities also offer various riders to customers that provide further levels of protection and benefit to the customers. Some riders provide an income benefit that guarantees a certain level of income to the customer, while other riders provide other benefits such as access to assets in case of a nursing home stay, principal protection with access to the funds, or even enhancements on the death benefit to offset potential estate taxes. Keep in mind, these riders are guaranteed by the insurance company underwriting the annuity, so these guarantees are based on the claims-paying ability of the issuer.

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