Convertible term life insurance. How do Annuities Work?, Types of Annuities,

Are you worried about outliving your income? That’s a risk that you may be able to do something about. When you invest in an annuity, you set the stage to receive income in the future, subject to the terms, conditions and or limitations of the insurance contract. Life insurance annuity.

An annuity is a long-term contract you purchase from an insurance company. It is designed to help accumulate assets to provide income for retirement. Annuities do have limitations. If early withdrawals occur penalties may apply and earnings are taxable as ordinary income and may be subject to a 10% federal tax penalty if withdrawn prior to age 59½.

How do annuities work?

An annuity is a long term investment that is issued by an insurance company designed to help protect you from the risk of outliving your income. Through annuitization, your purchase payments (what you contribute) are converted into periodic payments that can last for life.

Nationwide's annuities are flexible so you can choose one that enables you to:

Invest a lump sum or invest over a period of time

Start receiving payments immediately or at some later date

How to buy a life insurance policy

Select a fixed, variable or indexed rate of return

Investing involves risk and may lose value. All guarantees and protections are subject to the claims paying ability of the issuing company, but the guarantees do not apply to any variable accounts which involve investment risk and possible loss of principal.

What type of annuity could fit into your investment plan?

Whether your needs are immediate or long-term, you can choose the type of annuity whose features work for your situation:

Variable – With a variable annuity, you choose investments and earn returns based on how those investments perform. You can choose investments that offer different levels of risk and potential growth, depending on your investment goals and tolerance for risk.

Variable annuities are sold by prospectus. Before you invest, please read the prospectus carefully and consider the investment objectives, risks, charges and expenses of the annuity and its underlying investment options before you invest. Prospectuses for products and underlying investment options contain this and other important information. To obtain prospectuses, call your investment professional or the insurance company.

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Immediate – An immediate annuity is usually purchased with a lump-sum and guaranteed income starts almost immediately. Your investment converts into a guaranteed stream of income that is irrevocable once payments begin. In some situations, funds can be accessed, but some restrictions apply.

Fixed – With fixed annuities, the principal investment and earnings are both guaranteed and fixed payments are made for the term of the contract.

Fixed Indexed – This special class of annuities yields returns on contributions based on a specified equity-based index, such as the S&P 500.

A fixed indexed annuity offers returns based on the changes in a securities index, such as the S&P 500

Composite Stock Price Index. Indexed annuity contracts also offer a specified minimum which the contract value will not fall below, regardless of index performance. After a period of time, the insurance company will make payments to you under the terms of your contract.

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A fixed indexed annuity is not a stock market investment and does not directly participate in any stock or equity investment.
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