What is an Annuity?
An annuity is a type of policy issued by an insurance company that allows you to save money for retirement. The money you pay in can be either a lump sum or a number of payments. These contributions then earn interest, generally tax-deferred, and after a period of time, provide you with a stream of income.
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Types of Annuities
With today's volitile economy, you may not feel comfortable having all of your retirement savings in the market. This is why a Single Premium Immediate Annuity from State Farm® International Life Insurance Company Ltd. may be right for you.
Single Premium — The annuity is purchased with one lump sum. For example, you can use money you already have in your retirement savings, pensions, survivor benefits, an inheritance, or other savings.
Immediate — Your principal is converted into guaranteed monthly income, which can begin any time within 12 months of purchasing your annuity.
A State Farm Single Premium Immediate Annuity Offers Several Benefits
With an Immediate Annuity, you have a variety of income payment options to choose from. Your money provides guaranteed payments to you that begin soon after you make your initial payment. Depending on the tax-qualified or non-tax-qualified status of your annuity, a portion or the entire payment can be included in your taxable income. The owner can elect to receive guaranteed payments for life, or elect payments to be made over a specified length of time.
Plus, your monthly payments are not taxed until received — and may not be taxed at the full amount.
You should contact your lawyer or tax advisor for more complete information.
|W-2 Earned Income Required||Yes|
|Contribution Age Limit||Yes, age 71 for earned income.|
|Mandatory Distributions||Yes, after December 31st of the year you turn 71.|
More about Annuities
The death benefit is the value of the policy on the date of the annuitant's death. If you die before payouts begin, your beneficiary will receive the current value of the annuity. Once you've begun receiving payments, the amounts paid to the beneficiary will depend on the payout agreement.
With almost all annuities, the cash value of the policy will be left for your beneficiary. Your agent can help you set up your annuity to make sure the money will be passed down to your beneficiary.
State Farm® Annuities Products
Looking for information on discontinued State Farm Annuities products? Our product archive provides resources that can help answer your questions.
1 The amount of cash value available will generally depend on the type of permanent policy purchased, the amount of coverage purchased, the length of time the policy has been in force, premiums paid to the policy, and any outstanding policy loans. Unpaid loans and withdrawals will reduce the death benefit and policy cash value. Loans also accrue interest. There may be tax consequences associated with policy loans. State Farm agents do not provide tax or legal advice. Please consult your tax or legal advisor regarding your specific circumstances.
2 With Universal Life it is possible that coverage will expire when either no premiums are paid following the initial premium or subsequent premiums are insufficient to continue coverage. Changes in policy coverage amounts are subject to policy limits. Increases are subject to underwriting and may require additional premium.