Annuities are much similar to insurance policies. If you have an insurance policy, you know that you have to pay a monthly premium to the insurance company and in case you suffer injuries or damages in any kind of accident, the company will pay costs of treatment or damages. A pension annuity also works like an insurance policy, but the annuitant will only receive funds when he retires. Moreover, if you are an annuity holder, you will receive a regular income every month unlike an insurance policy.

The two major categories of annuities are fixed annuities and variable annuities. Under a fixed annuity, the individual will be investing in corporate bonds or government securities which will provide a specific rate for a certain period of time. This rate can apply for one year and up to ten years. On the other hand, there are variable annuities where the individual will be putting his money in mutual funds. These are various investment alternatives and the payment that will be received from these will depend on how active that particular investment option is.

Deferred annuity table – a deferred annuity rates table displays the interest rates that an individual can earn based on their deposit amount for a specified number of years. Since deferred annuities are not influenced by those factors which influence immediate annuities, there are differences in what you can expect to see when you make use of a deferred annuity table.

An annuity rates table is usually in a tabular form and shows graphical representations. They contain columns for specifics such as age, gender, rate of return expected, investment money and so on. With the help of an annuity table, you will be able to get an estimate on the amount or rather type of income you can get through your investment.

Tax Deferral – fewer income taxes apply should you choose to invest in annuities. Taxes will only be applied when you withdraw funds and in this way you will have total control over your tax liability.

Tax Advantage – if you are more than 70 years old and own an IRA you will be eligible to withdraw funds. Compounded Interest – due to tax deferral, compounded interest can be earned on the following: – invested funds – tax liability of the amount that would have been sent to the government – accumulated interest

Access to Funds – when you buy annuities, you may be able to access your funds and even make withdrawals in the following ways: – Get access to 10 percent of the total value of the account annually. – Interest earned can be withdrawn on a monthly basis. – You can convert the accumulated funds to an income stream for a specified period of time. – Your beneficiary will be entitled to every penny of your funds at anytime.

But, there are also certain factors that will need to be considered when making annuity rate comparisons. For example, you will need to determine how inflation will affect your annuity rates. And for this reason, the annuitant will have to protect his regular income from the effects of inflation.

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