People sometimes ask, How do I get money out of my annuity? Here are a few thoughts.

Immediate and deferred annuities have a number of annuity payout options you can select. If you’re concerned you might die too soon, there are options that would allow your family to get back what you put into it.

Individuals who purchase immediate annuities have a number of choices for a payout period. One option may be a cash refund. With this option, your beneficiary will receive a lump-sum payment based on whatever portion of the initial amount that wasn’t paid out to you. That guarantees the return of principal.

On the flip side, if you’re still living after your initial investment has been paid out to you, you’ll continue to receive the same monthly payment for however long you live.

Immediate annuities with period certain options are popular, too. If you pass away before the period certain, your beneficiary is guaranteed to receive payments for the number of years you chose. If you live past that date, you’ll still continue to receive payments for the rest of your life.

If you are worried about your significant other, you can choose a joint-annuity, guaranteeing payments until the last one dies.

Deferred annuities are written for periods of time. You get your money, plus the interest earned back after the period passes. A five-year annuity pays out in five years.

Insurance companies realize that life happens and you may need some of your money sooner than planned. Most companies let you withdraw 10 percent of the value of your annuity each year without a penalty.

Deferred annuities also have tax advantages. You pay no tax on the growth until you withdraw the money.

When purchasing an annuity, ask questions. What penalties will be applied if I take my money out early? How long is the interest rate guaranteed for? Does the issuing company participate in your state guarantee program? What are the ratings of the issuing company?

Bob Hollick is a State Farm Insurance agent based in Washington.

To submit columns on financial planning or investing, email Rick Shrum at rshrum@observer-reporter.com.

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