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Aspects of Annuities, Part 2: Our Products and The Pursuit of New Heights


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A gale from the southeast hurries onward, with a frigid, assertive push. This can be expected when nature is at liberty to take an aimless and uncharted course. High above the planet, free of rain, sleet, and snow, in what seems like mere miles from a fresh autumn sun, this gale is one of many winds unfragmented by the businesses, bridges and cottages across the English terrain beneath. Now at the verge of leaving a bright troposphere for another layer, these aforesaid constructions and the busy people that utilize all three cannot impede such motive efforts. Having glided past cumulus clouds both mountainous and wide, along with altostratus formations, we arrive at a backdrop richly made of blue and white. This is where nature has full reign.

It is the fifth of September in the year 1862. ManhattanLife enjoys its twelfth year of business in New York. Meanwhile, far overseas, real life writer Henry Coxwell and meteorologist James Glaisher struggle to survive aboard a hot air balloon that has climbed to a chilling 34,000 feet above sea level. Their last vestiges of warmth vanished, Coxwell and Glaisher weakly grasp at their remaining mental faculties as they continue an unprecedented voyage for even greater summits, with delight at the pure majesty before them well expired. Yet this scene amid howling and unforgiving skies, of courage clashing with fear, franticly ensues, even after vehement warnings were previously issued. These determined men have chosen to launch from the comfortable lands of Wolverhampton into an open and unknown region, soldiering forward, or upward, as it were, before confronting a terribly uncertain descent.

So just how do annuities figure into such a tense and true adventure? This author can assure you there is no clandestine cameo that has gone overlooked, nor is there any apparent record of an insurance policy or contract owned by either hot air balloon party member. However, there is a critical concept found within their harrowing tale and that is: Some people have great curiosities that require great risks to quench them. It is these men’s pursuits, both joint and separate, that lead them to take flight on that pivotal Friday. But, as alluded to in Part 1 of this blog series, irrespective of any wishes or hopeful outcomes, a firm objective means little without the prudent planning to reach it. Nestled inside this notion is financial preparation and maintenance, which should be done early and always. If you are nearing retirement age, in addition to a 401(k) or an IRA, annuities can aid in strengthening and creating a healthier retirement portfolio. Annuities, and their potential power to multiply your savings, can play an integral role in shrinking your concerns, while expanding your retirement horizons.

As stated in Aspects of Annuities, Part 1: The Basics and Backstory, an annuity is a contract between an annuity owner and an insurance company wherein money is put into an account. Then the owner has the option to receive regular payments either immediately or in the future. There are several types of annuities available on the market, each with the capacity to provide additional financial security. Manhattan Life Insurance and Western United Life Assurance Companies excitedly offer two kinds of deferred annuities: Multi-Year Guarantee Annuities (MYGAs) and Fixed Index Annuities (FIAs). Deferred annuities are contracts which stay in the accumulation stage until their maturity date, with the assets growing tax deferred. Once the maturity date is reached, the owner must then decide what to do next with the annuity.

Let’s examine each of these annuity products more closely.

Multi-Year Guarantee Annuities (MYGAs)

Our MYGA products are designed to help you grow your savings with as little risk as possible. It locks in a competitive and guaranteed fixed interest rate for up to 3, 5, 6, or 7 years. Straightforward and transparent, having a MYGA annuity will also earn compounding interest for the period selected. Below lists some of this annuity’s advantages. You can also find MYGA information on our website here.

Guaranteed Interest Rates

Your premium starts earning interest immediately based on our competitive, guaranteed interest rate.

Tax-Deferred Growth 

You only pay income tax when you begin taking withdrawals.

Accessing Your Money

Beginning the first year, you may withdraw up to 15% of your annuity value free of charge, depending on the annuity product chosen.

Leaving a Legacy

Leaving a legacy for your beneficiaries and avoid probate. In the event of your passing, and depending on the annuity product chosen, your beneficiaries will receive your full annuity value.

No Administrative Fees

There are no set-up or administrative charges. Your single premium accumulates interest immediately once the contract begins.

Fixed Index Annuities (FIAs)

Our FIA products offer both market-linked growth and principal protection. With our FIAs, your money can grow during market upswings and will never decrease during market downturns. Many types of investments involve considerable risks. We absorb some of those risks, while lessening yours. Below lists several of this annuity’s benefits. Find information on our FIAs here as well.

Index-Linked Growth

Your FIA allows you to share in some market gains by earning interest based on the performance of an index like the S&P 500®. 

Flexibility

Our FIAs offer three crediting strategies for you to earn interest - two based on the S&P 500® and a third that credits a fixed interest rate. Each year you will have the option to reallocate your funds among three strategies.

Tax-Deferred Growth

As with MYGAs, you only pay income tax on your money when you begin making withdrawals. Until then, more of your money works for you.

Leave a Legacy

As with MYGAs, you can leave a legacy for your beneficiaries and avoid probate. Your FIA will pay the full value of your annuity as a death benefit if you pass away.

Principal Protection

Although your annuity may grow with positive market performance, your funds are not directly invested in the stock market or S&P 500® Index. As a result, your annuity is guaranteed to never decrease in value even during periods of negative index performance.

No Administrative Fees or Charges

With no set-up or administrative charges, your entire premium accumulates interest immediately.

Owning either of these annuities can help build a larger monetary cushion for later in life, with protected growth that lessens the chance of outliving retirement savings. If you’re seeking an investment over a relatively short period of time, then a MYGA annuity may interest you over a FIA annuity. If you wish to potentially increase your annuity growth outside the parameters of a MYGA and reap the benefits of a positive index performance, then a FIA may be the annuity you inquire about. To learn more about Manhattan Life Insurance and Western United Life Assurance Companies’ annuities, have one of our friendly and qualified insurance producers contact you using this form.

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. No matter which type of annuity you ultimately choose, be sure to carefully read and understand your annuity contract as soon as you obtain it. Ask your insurance producer questions and consult your tax advisor for information about possible tax consequences. Neither Manhattan Life Insurance Company nor Western United Life Assurance Company, nor any of their insurance producers, provide legal or tax advice. Annuities are not insured by the FDIC. They are not the product of, nor guaranteed by, any bank. Product availability may vary by the owner's resident state, annuitant's issue age, and/or initial single premium amount. Other restrictions may apply.

But you may still wonder: What became of Coxwell and Glaisher? We return briefly to the suspenseful scene and its extreme altitude, where few birds choose to or even can move around successfully. At this point in the past, planes have yet to be devised, while airships are still quite rare and certainly avoid such elevations. The temperature continues to plummet as these two aeronautic men enter icy conditions. It turns out the hot air balloon was designed and built well enough to ascend, but moving downward presents a real problem.

Then, on that distant September day, in a sudden and desperate effort to avoid an unpleasant fate for the pair, Coxwell carefully got out of the basket. He then slowly climbed onto the ropes and mustered just enough force to successfully pull the valve-line, thereby opening the balloon’s valve at the very top and prompting a descent. Fortunately, the men managed to make it back to earth largely unscathed, while claiming a world record in the process and collecting new facts about weather, with their wellbeing and sanity incredibly intact.

As this article has articulated, there are copious opportunities for enjoying your later life. How much enjoyment may substantially depend on your investment choices. Fully determine which investments are best for you and monitor how they are managed. This way you can confidently embark on your own safe and money-backed adventures. As you approach retirement, annuities can absolutely serve as a terrific way to invest without some of the usual downsides. Build a firm plan, a strong retirement portfolio, have acute attention-to-detail, and some preparation for the unpredictable, all of which can take you quite far. Work to ensure your financial present and future are equally stable and defined. Explore what is out there, admire the weather, and even bask in its beauty. But avoiding prolonged and unplanned air travel is probably best. There are plenty of thrills to be experienced on the ground.

Stay tuned for Part III of this blog series, in which we highlight Western United Life Assurance Company’s dedicated and productive relationships with customers.

 

 

Works Cited:

Pechter, Kerry. Annuities for Dummies, 2nd Edition. Hoboken, John Wiley & Sons, Inc., 2023.

"Glaisher, Coxwell, and a near-fatal balloon ride". The Hindu. A.S. Ganesh, November 10, 2023. https://www.thehindu.com/children/glaisher-coxwell-and-a-near-fatal-balloon-ride/article36133439.ece

"The True Story Behind The Aeronauts". Time. Rachael Bunyan. December 16, 2019. https://www.time.com/5746565/the-aeronauts-movie-true-story/



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