What is an Annuity?

An annuity is a contract between you (the contract holder) and an insurance company (the insurer). All annuities have one feature in common that makes them different from other financial products. With an annuity, the insurer promises to pay you income on a regular basis for a period of time you choose—including the rest of your life. An annuity is an investment product that may be used to help you increase your savings, protect your savings, or generate a stream of income.


Choosing from today’s overwhelming assortment of investment, retirement savings, and life insurance options can be a dizzying experience. Which option will work best for your financial needs and goals? How will you know if the option you choose is a suitable means for meeting your objectives?


The National Association of Insurance Commissioners (NAIC) has Buyer's Guides for Annuities that are great informational publications available for free on their website www.NAIC.org or by clicking here.

Check out more information about our annuity products to best fit your retirement strategy.



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Annuities meet a wide range of needs, but they aren't for everyone.
  • If you are looking for immediate, unfettered access to your funds, a bank account may be a better choice.
  • If you want to participate in the equity market and are willing to assume greater risk, fixed interest rate annuities may not be for you. However, if you are looking for an excellent retirement planning tool that affords you tax benefits, flexibility, and safety, a fixed deferred annuity is likely to suit your needs and objectives.
  • Fixed deferred annuities can play an important role in just about anyone’s retirement planning. How large a role fixed deferred annuities will play depends on many factors, including your age, the amount of time you have to accumulate assets, and other factors your advisor can review with you.
  • The main purpose of an annuity is to save money for retirement and to receive retirement income for life. It is not meant to be used to meet short-term financial goals.
  • TAX DEFERRAL is one of the great advantages annuity products have over most bonds, bank certificates of deposit, and the majority of mutual funds. The interest earned on your annuity is tax-deferred; therefore, your money grows faster than it would in a taxable fund. As long as you keep your funds in the annuity, taxes are deferred. When you begin withdrawing funds, they become taxable.
  • The IRS considers your first withdrawals interest, but your principal generally is not taxable in a non-qualified plan (different rules apply to annuities in a qualified plan like an IRA). Withdrawals of interest income before age 59½ may be subject to a 10% federal income tax penalty. When you elect a settlement option (known as annuitizing), each payment includes a portion of your original (non-taxable) principal. For more details, you should go over the tax situation with your tax advisor.
  • FLEXIBILITY attracts many individuals to annuities. You decide how you want to be paid (in a single sum disbursement on a fixed date or in a series of payments); and you decide how the annuity will be handled after your death. Unlike other financial instruments, an annuity is able to provide you with a guaranteed income for the rest of your life—an income you cannot outlive.
  • AVOID PROBATE. A final advantage many annuities offer is the ability to avoid probate. Typically, annuity death benefits paid to a beneficiary, other than an annuitant’s estate, avoid the emotional and financial drain caused by probate.
  • Your annuity earns tax-deferred interest at a guaranteed rate for a guaranteed period. The guaranteed rate of your annuity depends on the guarantee period you have chosen and current market interest rates. Our interest rates are quoted on an effective annual yield basis. This means we credit interest to your annuity value daily and the accrued and unpaid interest is compounded annually.
  • After the guarantee period, the minimum interest rate will be re-determined annually and guaranteed for a one-year period. This renewal rate will never be less than the guaranteed minimum interest rate of 1%.
  • You may take money out of your annuity any time before the settlement date. You may withdraw all (full surrender) or part (partial surrender) of the annuity’s value. Partial or full surrender requests that exceed the penalty free amount are subject to surrender charges (and MVA if applicable).
  • Depending on which of our deferred annuity plans you choose, the amount you can withdraw free of surrender charges may include interest only, Required Minimum Distribution (RMD) or even 15% of your principal and interest. This may be an important consideration if liquidity is a concern.
  • With the exception of the WULA Max Choice plan, if the Annuitant dies before payments have begun under a settlement option, surrender charges are waived. The Beneficiary can choose to receive the annuity value as a single sum or under an available settlement option. If the Annuitant dies after payments have begun, the remaining value, if any, will be paid to the Beneficiary according to the settlement option chosen.
  • If the Annuitant and Owner are not the same person and the Owner dies while the Annuitant is still alive, surrender charges (and applicable MVA) are not waived. The surrender value must be distributed to any surviving joint or contingent Owner; or to the Annuitant if no joint or contingent Owner was named, within 5 years, or be paid out in installments as governed by the Internal Revenue Service (IRS). Therefore, if your annuity contract is paid out before the end of the surrender charge period, the payout may be less than the initial single premium you paid due to the surrender charges.
  • If this is a non-qualified annuity contract, and the sole Beneficiary is the Owner’s surviving spouse or civil union partner, that person may continue the contract as if they were the original Owner rather than take the proceeds.
  • There are no set-up fees, administrative expenses, or premium tax charges on our annuity contracts.
  • Free Look Period - After you receive your annuity contract, you have a minimum of 15 days, longer if required by state law, to review it. Please refer to the cover page of your Contract for the actual Free Look period. If you are not satisfied with it for any reason, you may return it with a written request to the Company or to the insurance producer who sold it to you for a full refund of the initial single premium paid.
  • We pay a commission to the insurance producer, broker or firm for selling you the annuity.
  • Neither Manhattan Life Insurance Company nor Western United Life Assurance Company, nor any of their insurance producers, provide legal or tax advice. Your personal tax advisor should be consulted on any specific points that may be of importance to you.
  • Annuities are contracts offered by an insurance company and are not insured by FDIC. They are not the product of, nor are they guaranteed by, any bank.
  • Once you and your advisor have determined that annuities are a good fit, you can then explore your options. It helps to discuss when and for how long you will receive income payments. This decision can be affected by whether you are married, what kind of payment schedule suits your needs, and whether you want payments to continue after your death.
  • Other Questions You Might Want to Explore are:
    • How much liquidity do you need?
    • What is the surrender charge schedule?
    • How important are free partial surrender features to you?
  • Annuities offer you a range of choices. So, it helps to thoroughly review your needs and objectives with your advisor before selecting an annuity product. We hope this has answered some of the questions you may have had, and that you’ll find just the right annuity for your needs and goals.