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The Basics of Annuities

Before purchasing an annuity, it’s important to know the fundamentals. Here are some helpful annuity basics to cover.

What is an Annuity?

An annuity is a contract between a policyholder and an insurance company. You make premium payments. In exchange, the insurer provides certain contractual guarantees. These guarantees cover a variety of contract components, including income, interest rates, or withdrawals. Premium payments may be a one-time lump sum or a series of payments over time.

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