An annuity is a contract between an individual (the annuitant) and an insurance company, where the individual makes a lump-sum payment or a series of payments in exchange for regular payments in the future. These future payments can be guaranteed for a specific period or for the annuitant’s lifetime, depending on the type of annuity chosen.

There are different types of annuities, but the two primary categories are:

  1. Deferred Annuities: With a deferred annuity, the payments to the annuitant are delayed until a specified date in the future. During the accumulation phase, the money invested in the annuity grows tax-deferred, meaning you won’t pay taxes on the earnings until you start receiving payments.
  2. Immediate Annuities: In contrast, immediate annuities start paying out to the annuitant shortly after the initial investment. These annuities are often used by individuals who are already in retirement or close to it, as they provide an immediate source of regular income.

As with any financial decision, it’s advisable to consult with one of our qualified financial advisor who can provide personalized advice based on your specific circumstances.

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