Strong Tower Advisors · Educational guide
Annuity types
How the main annuity types differ.
How we are involved. Annuities are insurance products. Strong Tower Advisors offers fixed and fixed indexed annuities through its insurance license (agency NPN 22216236) and Eduardo J. Valdes (individual NPN 8687827). Insurance and annuity sales are separate from investment advisory services provided through TLG Advisors, Inc., and TLG Advisors does not offer or supervise these insurance products. When we sell an annuity, we may receive a commission from the insurance company. Ask us how we are paid before you buy.
Quick answer: An annuity is a contract with an insurance company. You pay a lump sum or a series of payments, and the insurer agrees to make payments to you now or later. Annuities differ widely in how they credit growth, what they cost, how long your money is committed and what protections they offer. Any guarantees depend on the financial strength and claims-paying ability of the issuing insurance company.
The main types
| Type | How value is credited | Market exposure | Regulated as |
|---|---|---|---|
| Fixed (including multi-year guaranteed annuities) | An interest rate declared by the insurer for a stated period | None directly; rate risk at renewal | Insurance (state) |
| Fixed indexed | Interest linked to a market index, subject to caps, participation rates or spreads, with a floor that is often 0% | Limited; you do not own the index or receive dividends | Insurance (state) |
| Variable | Value rises or falls with investment subaccounts you choose | Yes; you can lose money, including principal | Securities (SEC/FINRA) and insurance; sold with a prospectus |
Immediate vs. deferred
An immediate annuity converts a lump sum into income that usually starts within about a year, often for life or a set period. Once payments begin, the money is generally no longer accessible as a lump sum. A deferred annuity has an accumulation phase first; earnings are tax-deferred until withdrawn, and you can later take withdrawals or convert the value to income. Withdrawals of earnings are taxed as ordinary income, and withdrawals before age 59½ may also be subject to a 10% additional federal tax.
Frequently asked questions
What is the difference between fixed, fixed indexed and variable annuities?
A fixed annuity credits an interest rate declared by the insurer. A fixed indexed annuity credits interest based partly on a market index, subject to limits such as caps or participation rates, and usually with a floor that protects against index losses. A variable annuity's value moves with investment subaccounts, so it can lose value; variable annuities are securities sold with a prospectus.
What is the difference between an immediate and a deferred annuity?
An immediate annuity begins income payments soon after purchase, usually within about a year. A deferred annuity grows during an accumulation phase and can be withdrawn or turned into income later.
Who offers annuities at Strong Tower Advisors?
Fixed and fixed indexed annuities are offered through Strong Tower Advisors' insurance license (agency NPN 22216236) and Eduardo J. Valdes (individual NPN 8687827). This is separate from advisory services provided through TLG Advisors, Inc.
Sources
- SEC Investor.gov — Annuities
- SEC Investor.gov — Variable annuities
- SEC Investor.gov — Updated investor bulletin: indexed annuities
- FINRA — Annuities
Educational only. This guide is not individualized investment, tax, legal or insurance advice and does not recommend any account, transaction or product. Rules and individual circumstances vary. Verify current official information and consult qualified professionals.