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What is an annuity?
An annuity is a financial contract between you (the annuitant) and the insurance company, in this instance the UNA. The annuity contract specifies that, in return for premium payments made by you, the UNA will guarantee interest to the annuity and will also guarantee income options. The premium payments to the annuity earn interest and accumulate from the time of deposit. The earnings grow and compound tax-free until withdrawn, thereby qualifying annuities as tax-deferred. Therefore, the value of an annuity contract is the premiums you paid plus accumulated interest.
Depending on the annuity, you can receive an income guaranteed to last for as long as you or your spouse lives. This guaranteed income is only possible with annuities and this is one reason why they are very useful as retirement tools. Annuities should not be used to reach short-term financial goals.
The UNA does not have any charges other than early withdrawal, called a surrender charge. In addition, the UNA does not offer variable annuities, which vary with market fluctuations. The UNA prefers to provide financially stability and security to its members, rather than relying on more risky returns. Therefore, it only offers fixed annuities, where your money earns interest at a set rate that is spelled out in the contract. A minimum interest rate is guaranteed and the amount of each income payment to you is generally set when the payments start and will not change.
For all annuities, any withdrawals of tax-deferred earnings are subject to current income tax and, if made prior to age 59 ½, may also be subject to a 10% federal income tax penalty. Consult with your tax advisor.
The UNA gives more than interest…
UNA annuities are a great option because:
- There are no administrative, sales, or maintenance fees
- 10% free withdrawal
- Surrender charges are waived during the following conditions:
- Policy held until end of term
- Terminal illness
- Nursing home confinement
- Catastrophic medical expenses
- Only a $1,000 minimum premium is required
The UNA’s Annuity Interest Rate History
(Click below to see the charts)
A flexible premium deferred annuity gives you the option to make flexible contribution payments as frequently or infrequently as you wish, while earning a declared amount of interest. This annuity is deferred, so you do not pay taxes on the interest until the money is paid to you. Payouts begin at a future date, specified by you.
- 9 year annuity
- Has a rate of 4.00% during the first year
- A full withdrawal (principal and interest) from the account prior to 9 years will incur a surrender charge
- 7 year annuity
- Has a rate of 3.50% during the first year
- A full withdrawal (principal and interest) from the account prior to 7 years will incur a surrender charge
- 5 year annuity
- Has a rate of 3.00% during the first year
- A full withdrawal (principal and interest) from the account prior to 5 years will incur a surrender charge
- 3 year annuity
- Has a rate of 1.00% for the 3 year period
- A full withdrawal (principal and interest) from the account prior to 3 years will incur a surrender charge
- 2 year annuity
- Has a rate of 1.00% for the 2 year period
- A full withdrawal (principal and interest) from the account prior to 2 years will incur a surrender charge
- 1 year annuity
- Has a rate of 1.00% for the one year period
- A full withdrawal (principal and interest) from the account prior to 1 year will incur a surrender charge
A Single Premium Immediate annuity, currently paying 1.75%, is purchased with a single premium deposit (principal). It allows you to convert this lump sum of money into a form of income payments, generally starting one month after you purchase the annuity.
A Single Premium Immediate annuity has several options or ways that income can be paid out:
- Income is guaranteed over the lifetime of the annuitant
- Income is paid over a specified period of time
- Income is guaranteed not only during the lifetime of the annuitant, but also for the lifetime of surviving spouse and/or partner
Individual Retirement Accounts (IRAs)
Established by individuals, who contribute a portion of their compensation towards savings for retirement
- Traditional IRA
- Contributions may be tax deductable, depending on income level
- Contributions are not tax deductable
- All earnings and principal are tax free
- Self Employee Pension (SEP)
- Plan established by self-employed individuals
Coverdell Education Savings Account (ESA)
- Allows for after-tax contributions of up to $2,000 per child, annually, until age 18
- Distribution is tax free if used for education and does not exceed cost of the qualified education
Please contact the UNA home office, or UNA agent if you have any questions about any of our annuities or wish to discuss which one may be most appropriate for your needs.
Disclaimer: All rates and conditions are subject to change. This site, although accurate to the best of our abilities, should be used for general information only. Please call the UNA home office or a UNA agent for latest available facts and figures.
All products may not be available in all states.