Annuity accounts are very flexible. Their maturity terms can range from as little as 1 year to 10 years or longer. Generally, an account with a longer maturity will have a higher interest payment. In addition, many insurance companies are offering 1st year premium bonuses between 5-10% if you meet certain criteria.

Most new annuities allow you to add money throughout the duration of the contract without re-starting the surrender period. Many contracts allow for systematic interest withdraws on a monthly, quarterly, bi-annual or annual basis without penalty. Unlike C.D.’s, these accounts also offer you access to a portion of your principal during the maturity period, usually up to 10% of the account value if needed.

At or before maturity, you have the option of withdrawing your money systematically like you would a pension or Social Security payment for income purposes. (This is called an annuitization – see the immediate annuity section for more details.) However, most Ohio consumers withdraw their annuities in a lump sum payment just as they would when cashing in a certificate of deposit. Others transfer their older account for new ones in what is called a “1035 tax free exchange.” This type of exchange allows any tax deferred interest in an older contract to be transferred tax free into a new contract.