- Some people use annuities as they would Certificates of Deposit, rather than as retirement vehicles. The original purpose of the annuity contract was funding over a long period of time leading to the start of the retirement payout period on the maturity date. The maturity date is when the owner selects a settlement option on the annuity.
Example: one settlement option can guarantee a lifetime income to the owner. At application, the maturity date of 20 years or age 70 is set, but the annuity owner can change that date with the issuer's approval.
- Annuity proceeds pass to beneficiary(s) outside of probate, and are immediately available to the named beneficiary(s) without waiting for the court to act and are generally passed without legal fees. When claiming a retirement option, any gain is evenly reported as interest income over the length of the projected retirement payout period.
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