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Insurance Companies CD alternative provide more income on your deposits due to higher penalties for early withdraw.
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Avoids probate.
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If income is re-invested taxation is deferred until taken out as income .
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On many contracts some principle can be taken out after 1 year (typically 3 - 4.5% without penalty).
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Interest is guaranteed for the period selected.
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Penalties are imposed if annuitant dies, is confined to nursing home or request a payout of all principle and interest over a minimum three year period.
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Funds are protected up to $100,000 per contract in a separate insurance fund.
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Immediate Annuities for guaranteed income (excellent escape from penalties, averaging gains and reduction of estates).
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Also available are Flexible Savings Accounts, Indexed annuities, Variable Annuities.
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