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Both annuities and life insurance should be considered in your long-term financial plan. While both include death benefits, you buy life insurance in the event you die too soon and an annuity in case you live too long.  Life insurance provides economic protection to your loved ones if you die before your financial obligations to them are met, Annuities guard against outliving your assets.

Comparing Deferred and Immediate Annuities
The two main types of annuities are deferred and immediate.  The two main types of life insurance are term and whole life.  The table below shows a quick comparison of these different options that are available to you in your planning.

Take a look at the table, but please feel free to contact us to discuss any questions you have.  Let us help you plan for your loved ones to preserve your legacy and protect your family.

Life Insurance Annuities
Term life Whole life Deferred annuities Immediate Annuities
Reason to Buy Provide income for dependents Provide income for dependents or meet estate planning needs To accumulate money in a tax-deferred product To assure you don’t “outlive your income”
Pays When You die You die, borrow the cash value or surrender the policy You make withdrawals One period after you buy the annuity, stops paying when you die*
Payment Single sum Single sum Single sum or income Lifetime income
Typical Buyer’s Age 25-50 30-60 40-65 55-80
Tax-deferred Accumulation No Yes Yes Yes, but only in the early payout years
Death Benefit Yes Yes Yes *payments continue if the annuity has a guaranteed-period option that hasn’t expired at the annuitant’s death
Taxable Benefits? No No, unless a cash value withdrawal exceeds the sum of premiums Yes, but only the part derived from investment income Yes, but only the part derived from investment income