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What is Kentucky Annuity Insurance?

May 20th, 2013     News

A Kentucky annuity insurance plan in the simplest terms is a plan that you pay into (typically life insurance) that you can get income out of at retirement. It is an investment strategy. There are different types of annuity insurance plans.

The payout period is determined by which type of annuity you choose and the terms of the plan.

Types of Kentucky Annuity Insurance

Deferred and Immediate are the two most common types of annuities each one serves a different purpose. The deferred annuities are plans in which you pay into until an agreed upon date when you start receiving payments. The immediate annuities start paying out immediately; usually someone very close to retirement will choose the immediate plan.

Payments from each plan can be made out monthly quarterly or annually. Here is the confusing part each plan can be either a fixed plan or a variable plan. The fixed plans whether they are immediate or deferred plans pay out an agreed upon rate. While the variable plans fluctuate depending on the current interest rates. The variable plans are not made for the weak of heart.

Tax Benefits

Most people that have money to invest want to find some shelter from the tax man. The money that you invest in annuities is tax deferred. That means that your initial investment is not taxed nor is the interest until you begin withdrawing money.

Once you are receiving payments the original investment is not taxed but your earnings are at the regular income tax rate.


Annuities offer the investor a way to invest a large sum of money and defer the income tax on the money. There is no annual limit on investing as there are on 401 K’s and IRA’s. You can invest as much of your income into an annuity without being taxed on that income.

Annuities also offer a steady stream of guaranteed income if you opt in for a fixed deferred plan which means you will have a nice monthly income to add to your other retirement products.

We can explain Kentucky annuity insurance in detail if you think this may be something you are interested in. Check out some more information at today!