Yes. With an annuity, the insurance company promises to pay you income on a regular basis for a period of time you choose, including the rest of your life. Only an annuity can pay an income that can be guaranteed to last as long as you live.
An annuity is a contract in which an insurance company makes a series of income payments at regular intervals in return for a premium or premiums you have paid. Annuities are most often bought for future retirement income. An annuity is neither a life insurance nor a health insurance policy. It is not a savings account or a savings certificate.
A deferred annuity has two parts or periods. During the accumulation period, the money you put into the annuity, less any applicable charges, earns interest. The earnings grow tax-deferred as long as you leave them in the annuity. During the second period, called the payout period, the company pays income to you or to someone you choose. Your value in an annuity contract is the premiums you’ve paid, less any applicable charges, plus interest credited. The insurance company uses the value to figure the amount of most of the benefits that you can choose to receive from an annuity contract.
Fixed annuities guarantee your money will earn at least a minimum interest rate. You shouldn’t buy an annuity to reach short-term financial goals. You may want to consult independent advisors. Make sure you’re satisfied with the answers from your agent or the company before you buy.
Receive your free NAIC Buyer’s Guide to Fixed Deferred Annuities at
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youtube.com/@AnnuitiesExplained. Contact Jeffrey Scott McLeod, LUTC for personalized guidance tailored to your state.
Educational content provided by Jeffrey Scott McLeod, LUTC, National Insurance Producer License #558629. This is for informational purposes only and is not a recommendation to buy or sell any annuity. Guarantees are subject to the claims-paying ability of the issuing insurance company. Always consult your own advisor and read the full NAIC Buyer’s Guide. For residents of your state.
Jeffrey Scott McLeod, LUTC — National Producer #558629.
Questions? Contact Jeff@AnnuitiesExplained.org.
Source: © 2025 National Association of Insurance Commissioners (NAIC). Reprinted with permission. Further reprint or distribution strictly prohibited without written permission of NAIC.
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