Annuities are basically of two types:
1. Deferred annuities
2. Immediate annuities

DEFERRED ANNUITIES:

These are annuities that allow us to gather money for future and use it when required. As in, during retirement all of us will be in need of money so, we save the annuities while working and withdraw the saved money during our retirement age

IMMEDIATE ANNUITIES:

As the name itself mentions, immediate annuities are those that are in want of “at once” or immediately. It is like, using the annuities as and when the retirement age approaches or nearing the retirement. One simple difference between deferred and immediate annuities is that, deferred are saved and then used later while immediate are used when the objective of using the money is nearing Discussing further, these annuities can be either fixed or variable. They are chosen depending on whether they are used as a fixed sum or a group or combining both of them  

MORE ON ANNUITIES: 

FIXED ANNUITIES:

• They are similar to certificate of deposits (CD) that pay guaranteed rate of interest rather than higher banks 
• They are of types deferred and immediate as mentioned above. This is considered as a very famous option for retirees 
• An advantage is that they provide attractive rate of interest that will impress the buyers on varying up’s and downs of stock market. They are impressive because of the quote between $1000-$10,000 
• The disadvantage here is that the price rate may fall  down any moment say, after a year and if you want to withdraw your invested money it would be a big problem as withdrawing rises a very huge amount

VARIABLE ANNUITIES:

• These are retirement transports that are tax-deferred and helps you choose your investments from a selection listed 
• They give you rate of interest that check your performance on the investment selected which is further compared with fixed annuities 
• The advantage here is that unlike fixed annuities you will be given long term capital that helps you in savings
• There are a lot of disadvantages in variable annuities like taxes, investment risk, fees. With, investment risk if the wrong ones are chosen the annuity literally goes down resulting in low profit. Again with tax, we can convert long term capital taxed to normal income which leads to higher investments

EQUITY INDEXED ANNUITIES:

• An equity indexed annuity is a combination of both fixed and variable annuities.  
• With a fixed annuity, you get guaranteed return. As with variable, you get high income with rise in stock market issues  
• We get high income than fixed even if the stock market fails and also a minimum return as in when compared with variable we have less risk 
• The disadvantage here is complexity, which means it is very difficult for the investors to understand what it is and marketing also is unbelievable. They  don’t give your return as expected or as they promised    

IMMEDIATE ANNUITIES:

• Immediate annuities are like life insurance policies, it is like we giving the insurer a lump sum rather than paying annually 
• We have options for payments like in 20 or 30 years or as long as we live these are usually used for people in retirement age. Deferred can also be converted into immediate annuities 
• The payments usually meet our expectations or equal to what we put and get back. With fixed annuities we have the advantage of settling our life for few years or forever 
• The drawbacks here depend upon whether you choose a fixed or variable annuity. With fixed, you get a payment for the rest of your life probably, till you die. In immediate, they help your payments by not being destroyed by increase in prices, again they might not be sure since payments may differ depending on the performance of your payments

 LONGEVITY ANNUITIES:

• We kind of need patience for this, as the payments here are made only we reach 80 or so. But once if you have attained that age you be given a regular sum for the rest of your life 
• The money here is usually protected beyond our expectations. If the required person dies when the period approaches for receiving payments, his/her heir will be receiving them
• Longevity annuities give you guaranteed payments late in life, for you sacrificing yourself  for a risk that cannot be handled by yourself
• The major disadvantage that no one will be able to take is here, incase if you die before receiving your payments the money that you are supposed to receive will be destroyed from your account and will be taken care of the banker’s

So, this is all about annuities and their types…

Annuity Scam:

Annuities are safe and useful financial tools, but at the same time you must know the dangers of working with unethical insurance agents. While the industry is regulated by a number of state and federal agencies, these fraudulent incidents are still happening in which new investors and seniors are deceived into buying unsuitable products or selling their annuity for unfair amounts.

So, you must be aware of the annuity scams that are happening;

Some of the annuity scams are:

The below mentioned tips may help you to stay safe from the annuity scams:

• Choose an annuity with low yearly fees and also pay attention to annual maintenance costs
• Skip or avoid signing up for a premium bonus
• Get to know about the liquidity issues with owning an annuity, as withdrawals come with fees and IRS tax penalties
• Be cautious that the agents will be paid with higher commissions for variable annuity sales
• Always avoid annuities that have surrender schedules which last more than seven years
• Talk to a tax professional to get a fully fledged knowledge about tax and tax deferment
• Have someone who is trustworthy when you sign your policies
• Do not put more than 35 percent of your assets into annuities