Page 17 - AAA Now! – AAA Schuylkill County – Winter 2020

INSURANCE SERVICES
AAA
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WHAT’S THE DIFFERENCE BETWEEN LIFE INSURANCE AND AN ANNUITY?
Both life insurance and annuities are financial tools that can help create a stable financial future, but they help you achieve somewhat different goals.
Most people purchase life insurance for its death benefit. That means if you were to die during the length of your policy, your beneficiaries will receive the benefit. This helps to ensure that your loved ones are taken care of financially in your absence.
Life insurance is often purchased when the financial need is great and your savings or access to backup funds is limited. That’s often the case for young couples, new parents, and parents with growing families and growing expenses to match.
Keep in mind there are several types of life insurance. Term life insurance offers coverage for
a specific period of time, or “term,” often 10 to 30 years. Whole life insurance is in place throughout your lifetime, as long as you pay the premiums when they are due. People may use the cash value to help pay for college tuition, start a business, buy a vacation home, or as a permanent financial tool. It often has a cash accumulation feature that you can tap into if you need to; keep in mind, though, that the final death benefit amount would reflect any
fees and debt taken out and not yet repaid. Typically with term and permanent forms of life insurance, the beneficiaries generally receive the death benefit tax free.*
An annuity is also there to help you plan for your financial future, but is often used to provide a guaranteed income stream over a given period of time – typically the life of the person who bought the annuity. This can be a good tool to use in retirement, so you don’t outlive your income.
Keep in mind that there are two different types
of annuities – fixed or variable. Fixed annuities, for example, typically guarantee that you will receive your principal (what you paid in) and a set amount of interest in predictable payments. Variable annuities, which have an investment component often linked to equities markets, do not generally offer the same income guarantees, given market fluctuations. However, they may offer the potential of greater gains (or losses). Some annuities may also include a death benefit that pays a beneficiary a predetermined amount.
This is just a very general glimpse at annuities, which feature a range of possibilities to help meet
your retirement goals with provisions that can vary with from contract to contract. It’s important to get professional advice about annuities and how they can help you meet your financial goals.
Both life insurance and annuities offer benefits that can help you and your family on your long-term financial path, but keep in mind that one does not replace the other. An insurance professional can
sit down with you to discuss your specific financial situation.
AAA Life and its agents do not provide legal or tax advice. Therefore, you may wish to consult independent legal, tax, or financial advice prior to the purchase of this policy.
TAX-DEFERRED ANNUITY EARN UP TO4.20%** Earn no less than
1.70% for the first
5 years—guaranteed. Earn a minimum of 1% thereafter.
ASK ABOUT A
Benefits of AAA Life’s Platinum Bonus Annuity include:
• Maximized earnings through the power of tax-deferral*
• A competitive interest rate with an additional first-year bonus**
• Free withdrawal once per contract year, up to 10% of the accumulated value
CURRENT FIRST-YEAR INTEREST RATE FOR PLATINUM BONUS ANNUITY®
To learn more, contact an agent today!
570-622-4991
*Under current federal income tax law. AAA Life and its agents do not provide legal, tax, or financial advice. Please consult your professional advisor prior to the purchase of any contract.
**First-year rate shown above is current as of 7/18/2019 and subject to change without notice. It includes a first-year bonus for the first contract year only and is for issue amounts of $500,000 and above.
Benefits may be taxable. Rates shown are annual effective yields. The first-year interest rate is guaranteed for first contract year only. It is separate from the guaranteed minimum rate effective for all contract years. Interest rates are credited from the first day of receipt of funds. Annuities are not short-term products. During the surrender charge period, withdrawals exceeding 10% will be subject to a surrender charge that may be higher than fees associated with other types of financial products and may reduce principal. Withdrawals prior to 591⁄2 may be subject to IRS penalties, separate from the annuity’s schedule of surrender charges. For complete details of coverage and specific details of the surrender charge schedule, please refer to the contract. Policy and its features may not be available in all states. Life insurance underwritten by AAA Life Insurance Company, Livonia, MI. AAA Life (CA Certificate of Authority #07861) is licensed in all states except NY. Automobile Club of Southern California CA License #0003259. CSAA Life Insurance Agency of California, Inc. CA License #0D12130. Insurance products in Northern California offered through AAA Northern California Insurance Agency, License #0175868, in Nevada by AAA Nevada and in Utah by AAA Utah. Your local AAA club and/or its affiliates act as agents for AAA Life. Platinum Bonus Annuity Contract Form Series: ICC11-4111/DA-4111 (In OR: ICC11-4111).
ALAN-25058-N19-XX
WINTER 2020
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