Rolling Over a Deferred Annuity?

[turkjey5]

if a deferred annuity has been annuitized does it continue to earn interest? E.g. you invested 10000 in a 10 yr deferred annuity that grew to 15000 and then started taking payments, does any interest continue to accrue?
thanks!!

 

[iceco1d]

No. You essentially give up your lump sum, in exchange for income for life, or income for a period certain (or both).

Note: Lifetime income riders are not considered annuitization, and you do still continue to earn interest while taking lifetime withdrawals.

 

[turkjey5]

Would the insurer continue to make money on your money as it is being paid out? E.g. for a 10 yr period certain payout would the insurer earn interest on the decreasing balance as it is being paid out to you? In other words, does the insurer make money after payments begin on a deferred annuity?
Thanks!!

 

[Norwayguy]

Would the insurer continue to make money on your money as it is being paid out? E.g. for a 10 yr period certain payout would the insurer earn interest on the decreasing balance as it is being paid out to you? In other words, does the insurer make money after payments begin on a deferred annuity?
Thanks!!

When you annuitize the policy the carrier builds into the income stream a calculation for interest, so yes your money makes money however it is 100 percent shown upfront when the annuitization letter says $x per month for life contingent 10 years or however you set it up.

Is the carrier continueing to make money. YES and I want them to make money so they remain solvent.

 

[iceco1d]

Note: If you took the trail option on a FIA (or any other annuity, except a SPIA), the trail will most likely stop if/when the contract is annuitized. Just in case you were wondering if you stop making money when that happens, the answer is usually "yes."

 

[turkjey5]

One thing I'm wondering about. In a book called Annuities by Shapiro there is a sample contract of a 10 yr. anniuity and under payment option no. 2 "for a designated number of years" there is a table called "limited installments." In this table you have:

Amt of installment per $1000 of proceeds-
No. of years payable annual amt.
1 $1000
2 $509.80
3 $346.49

So it appears that the longer the payout you get more per $1000 of proceeds. How is that possible if your proceeds are fixed at annuitization?
Thanks!

 

[sman]

Well, they way you wrote that sentence....

You're slipping arn. Shouldn't that be 'the' and not 'they'?