Home About Us Annuities Life Insurance Foreign National Financial Information Careers Contact Us Annuity Basics In today's world, an annuity is a popular tool used by consumers to protect their savings and plan for retirement. When considering whether to purchase an annuity, it's important to understand how the value of the annuity is determined, the liquidity options available to you, as well as any tax benefits or implications of placing retirement savings in an annuity. Before you decide to purchase an annuity, ask yourself the following questions: "How much annuity income will I need and for how long?" "When will I need access to the funds?" "Do I have an emergency fund set aside to meet my other obligations?" What is an annuity? An annuity is a financial product that accumulates interest on a tax-deferred basis. An annuity is typically used for saving for a long term goal - such as retirement - and is not appropriate for short-term purposes. An annuity is not an investment product or a savings account. It is designed to provide systematic payouts over a period of time based on various retirement or other planned income schedules. Much of the attractiveness of annuities is due to the favorable tax treatment. Unlike interest on savings accounts and dividends from stocks and mutual funds which are taxable in the year earned, interest credited on a deferred annuity is not taxed until funds are withdrawn. Types of Annuities Annuity contracts can vary in a number of ways. Described below are some of the ways annuities differ and are commonly categorized. When benefits are received Annuities may be either immediate or deferred. Immediate annuities provide income payments that start shortly after you pay the premium, typically within a year. Deferred annuities provide income payments that start at a later date. The primary reason for buying an immediate annuity is to obtain an immediate income, frequently during retirement, for those who want to receive a set amount on a recurring basis. In contrast, a deferred annuity accumulates money on a tax-deferred basis until it is eventually dispersed, either as a lump sum or as a series of recurring payments at a later date. How premiums are paid Annuities may be either single premium or flexible premium. Single premium annuity contracts allow only a one- time premium payment to the Company for deposit into your annuity. Flexible premium annuity contracts are designed to allow multiple premium payments-you pay as much as you wish whenever you wish, within specified Company limits (varies by product). How interest is credited Annuities are also categorized by how interest is credited, referred to as either "fixed" or "variable". Fixed annuities have a guaranteed rate of interest for a specified term, providing predictable future contract value. Another type of fixed annuity is a fixed indexed annuity, which provides the option of having interest accumulation based on a formula that is linked in part to growth in the equity market as measured by an index such as the S&P 500®. Subject to fixed minimum guarantees, the value of a fixed indexed annuity will never decline due to index movement alone. Conversely, variable annuities offer a variety of investment options, typically mutual funds. The value and growth of the variable annuity is dependent on the performance (whether positive or negative) of the underlying investments. National Western Life does not offer variable annuities. Please submit the form below to communicate about purchasing an annuity. Please do not use this form for other issues such as active policy information as it cannot be addressed through this form. Please contact customer service for policy issues at 1-800-922-9422. 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