Flexible Premium Deferred Annuity

A Flexible Premium Deferred Annuity has risen in popularity over the years. To fill this need, Insurance companies sell contracts which have variable premium payments and payments amounts. Premium payments can be monthly, quarterly, semi annually or annually throughout the life of the annuity policy.

Flexible premium deferred annuity (FPDA) policies can accept ongoing small deposits of even $50 per month. The interest rate guarantee period on each deposit is for one year; at the end of the guarantee period the depositor can benefit from competitive renewal rates, which are based on current market conditions.

- One of the main advantages is that each contract comes with a principal guarantee; this guarantee ensures that a client does not receive any amount which is less than the total premium payment due.

- As a savings medium FPDA is an ideal choice for anyone who is looking for flexibility on continuing premium deposits and tax deferred financial growth. It is a very good method by which to enhance retirement savings plans, which can be used to fund your IRAs, SEPs and other plans.

- A truly great advantage of this method is that irrespective of any economic fluctuations the client will never receive anything less than the total premium payment due (minus any loans or withdrawals). This type of annuity comes with a principal guarantee most investment mediums do not offer.

- FPDA is a dependable savings option for people who do not wish to take risks with their money for fear of losing a part or all of it.

- Annuities are one of the best methods by which you can provide a steady source of income for yourself after retirement, when the fear of your money running out begins to haunt you.

- With annuities your investments grow tax free – this is probably one of the best benefits for people in the retirement stage of their lives.

- Anyone can contribute any amount to the FPDA plan as there are no restrictions on investments. Check with the insurance carrier to find out what the min. additional premium is.

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