In addition to the two basic types of fixed annuities and the different payout options, issuing companies may also offer additional product features. Here are summaries of some of the more common additional options that are made available with some fixed-annuity products. It should be noted that this is not an all-inclusive list, and that some of these features are optional and come with an additional cost that will reduce your account value, and may have longer surrender periods.
"Bailout" Provision: Some fixed annuities come with a "bailout" provision, which enables you to avoid a surrender charge if the declared interest rate decreases by a specified amount (e.g., 2%) upon renewal. In this case, you could exchange to a new annuity or liquidate, but would still be subject to early withdrawal tax penalties, if applicable.
Bonus Rates: In order to secure new business, sometimes issuers will offer a bonus interest rate that exceeds the rate it would otherwise be paying, usually in the first year of the contract. Since annuities have limited liquidity, a buyer who is offered a bonus rate should carefully review (or have his or her representative do so) the renewal rate history of the issuer before making the decision to purchase.
Multi-Year Guarantees: Some issuers may offer longer-term interest rate guarantee periods between renewals (three to ten years). Be aware that if you choose a longer period, you may encounter additional stiff penalties if you want to pull out your money prior to the end of this period.
There are other features and variations that may be available to you when making your decision. Be sure to carefully review all options.
Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC. Insurance products are offered through LPL or its licensed affiliates. Premier America Credit Union and Premier America Investment & Retirement Services are not registered as a broker-dealer or investment advisor. Registered representatives of LPL offer products and services using Premier America Investment & Retirement Services, and may also be employees of Premier America Credit Union. These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of Premier America Credit Union or Premier America Investment & Retirement Services. CA Insurance License #0759204, TX Insurance License#1643255.
Securities and insurance offered through LPL or its affiliates are: