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Annuities can help meet your retirement needs

You protect your car, your home and even your life with insurance, but are you leaving your retirement income unprotected? With potential for tax-deferred growth and a guaranteed income stream, annuities can be important to your retirement objectives. Annuities from Protective may help you grow — and protect — your retirement income. Work with your financial professional to find out if an annuity may be right for you.
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An annuity is a retirement investment vehicle that can offer benefits, including:

Tax-deferred growth
Any growth within your annuity is tax-deferred until you withdraw it — similar to how a 401(k) works.*
Guaranteed lifetime income
Annuities can give you a steady stream of income for a set period of time or for your lifetime.
Guaranteed death benefit
An annuity can pay money directly to your beneficiaries when you die, helping them avoid a lengthy probate process.
*Annuity payments from a tax-qualified plan will be fully taxable as ordinary income. Withdrawals made prior to age 59 1/2 may be subject to an additional 10% IRS tax penalty.
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Interested in learning more about annuities?

Whether you're interested in growing your retirement savings, guaranteed income for life, or both, Protective can walk you through our options. Check out our annuities online or work with your financial professional to find out if an annuity may be right for you.
Understanding retirement annuities

Protective’s annuity options offer ways to grow your retirement nest egg based on your risk tolerance, while also deferring taxes on that growth. And when you’re ready to retire, you have a wide variety of options to guarantee that income stream for as long as you need - even for the rest of your life.

Annuities can be purchased to start paying immediately or to postpone payouts to the future.

The payouts from an annuity contract can be made as one lump sum or as a series of payouts over time based on your needs.

The information below walks you through several uses for annuities and then reviews specific categories and how they work.

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How an annuity works
An annuity is simply a contract where one party agrees to make either a single payment or a series of payments, and the other party then agrees to do the same in return at some point in the future.
Annuities typically have two phases:

  1. Accumulation — A period of time when the owner, or annuitant, is accumulating value in the annuity. This will usually occur before an individual retires.

  2. Distribution — The payout phase of an annuity comes when the accumulated value is distributed – either via a lump sum or a series of payments over time.

 Illustration of Annuity Phases
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Immediate annuities and deferred annuities

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Immediate annuities
  • Funded with a single lump-sum purchase
  • Can provide a guaranteed lifetime stream of income
  • Referred to as single premium immediate annuities, or SPIAs
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Deferred annuities
  • Funded with either a lump sum payment or a series of payments
  • Pay out at a future date
  • Divided into three categories: Fixed, Indexed and Variable

Types of deferred annuities and their features

Fixed annuities
  • Earns a guaranteed rate of interest for a set period of time
  • Principal and interest are guaranteed by the financial strength of the insurance company that issues it.
Indexed annuities
  • Earns interest based on performance of an underlying financial benchmark like the S&P 500 Index, subject to interest rate caps
  • Offer a guaranteed minimum rate of return, which can be as low as 0%
Variable annuities
  • Earnings based on the performance of the investment options (or 'subaccounts') you select from among those offered under the annuity
  • Do not offer guaranteed returns and may lose or gain value depending upon the performance of the investments

What type of annuity is right for you?

At Protective Life, we offer different types of annuities to help meet your particular financial goals in retirement. Our annuities include enhanced income features, competitive fees and expanded investment options.
Annuity comparison chart
Comparison chart for fixed, indexed and variable annuities indicating which types offer tax-deferred growth, death benefit, single purchase payment or installments, minimum guaranteed interest rate, principal protection, market-linked growth potential and investment options.

Product guarantees are backed by the financial strength and claims-paying ability of the issuing company. Withdrawals made during an annuity's surrender period may be subject to surrender charges. Annuity withdrawals made prior to age 59 1/2 may be subject to a 10% penalty tax.

Why financial strength matters
Annuities have no FDIC or NCUA insurance. The guarantees offered are backed by the strength of the issuing insurance carrier. That makes it even more important to choose a carrier you can trust. Protective Life has been around for more than 100 years, and carries high ratings from independent rating organizations.
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Common questions about annuities


An annuity is a contract between you and an insurance company. The insurance company invests your payments based on the type of annuity you select, and you choose the payout frequency. They are often used as a retirement savings vehicle and can help individuals avoid the risk of outliving their money.

Annuities work like a contract between you and an insurance company. You agree to pay a single lump sum or make payments over time. The insurance company invests your money in different ways depending on the type of annuity you select. You then choose the payout option that works best for your financial goals.

Annuity pay out amounts depend on the type of product you select. Talk to your financial professional to decide which annuity is the best fit for your goals and budget.

Taxes will depend on the annuity you select and the withdrawals you take. Many annuities are tax-deferred, so you can wait to pay taxes until you start receiving the funds. This saves you money in the immediate future and provides opportunities for higher gains.

Get a retirement annuity with Protective Life

Protective Life offers a wide variety of annuities to meet your needs. Work with your financial professional to find out if an annuity may be right for you. For more information on annuities, visit our learning center.
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The Learning Center can help you understand retirement annuity options

What is an annuity?
Need more information about annuities and how they work? We can help.
Annuities as part of your retirement plan
Find out if an annuity fits your retirement plan with this information.
3 tips for selecting an annuity
Choosing an annuity is easier when you know what to look for.
*An immediate annuity will not have an accumulation phase.

Variable annuities issued by Protective Life Insurance Company (PLICO) Nashville, TN, in all states except New York and in New York by Protective Life & Annuity Insurance Company (PLAIC), Birmingham, AL. Securities offered by Investment Distributors, Inc. (IDI). IDI is the principal underwriter for registered insurance products issued by PLICO and PLAICO, its affiliates.

As you determine what annuity might be right for you, remember they are intended as vehicles for long-term retirement planning, which is why withdrawals reduce an annuity’s remaining death benefit, contract value, cash surrender value and future earnings. Annuities also may be subject to income tax and, if taken prior to age 59 ½, an additional 10% IRS tax penalty may apply. Because Protective and its representatives do not offer legal or tax advice, it is important that you talk with your own legal and tax advisor about your specific tax situation.

Product guarantees are backed by the financial strength and claims-paying ability of the issuing company.

Investors should carefully consider the investment objectives, risks, charges and expenses of a variable annuity and the underlying investment options before investing. This and other information is contained in the prospectuses for a variable annuity and its underlying investment options. Prospectuses may be obtained by contacting PLICO at 800.265.1545.

An indexed annuity is not an investment in an index, is not a security or stock market investment and does not participate in any stock or equity investments.

Annuities are not a deposit, not insured by any federal government agency, carry no bank or credit union guarantee, are not FDIC/NCUA insured and may lose value.