Fixed Annuities

Overview
FAQ

Overview

Imagine investing for the future, knowing your principal is safe and your future income predictable.

With a fixed annuity, you can have both safety and predictability.

When you purchase a fixed annuity, your principal is safe and you’ll earn a guaranteed rate of return. Once you decide you need income, you can convert your annuity assets into a stream of fixed income payments that will last as long as you live.

Is a fixed annuity a good choice for you?

Only you and your financial professional can decide that for sure. But here are a couple of questions that might give you an idea…

Will you need income payments that you cannot outlive?
Do you worry when the stock market falls?
Do you prefer to know that your investments are making money, even if it’s only a little money?

If you answered “yes” to all of these questions, you may want to consider adding a fixed annuity to your overall financial strategy. Contact your financial professional to discuss it further.

FAQ

The Basics

What is a fixed annuity?

A fixed annuity is basically a contract between you and an insurance company. You agree to purchase the annuity by making one or more payments. The insurance company agrees to pay you a stream of fixed income payments at some point in the future. Your payments can last a specific period of time or for the rest of your life.

How is a fixed annuity different from a variable annuity?

Fixed annuities typically offer more safety and predictability than a variable annuity. That’s because, with a fixed annuity, you know how much you’ll earn and for how long you’ll receive that interest rate. Your principal is guaranteed as well, so you know that you’ll never lose it.

The company behind the annuity

How can I be assured that my principal is safe?

Your principal is guaranteed by the insurance company. They promise to keep your principal safe and offer guaranteed interest rates.

How do I know that MetLife will live up to its guarantees?

Because MetLife manages its company and its businesses with discipline and a long-term approach in order to ensure that it can fulfill its promises. The guarantees within MetLife’s fixed annuities are backed by the financial strength and stability of MetLife. This financial strength comes from MetLife’s high quality diversified portfolio of investments, its diversified mix of core businesses and its risk management strategies.

Taking Income

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How can I take income from my fixed annuity?

You can turn your assets into a stream of lifetime income payments.

You are also typically able to take 10% of your money out of the annuity during a single year without a surrender charge. If you are under age 59½, you may be subject to a 10% federal income tax penalty, though, as well as the income tax itself.

What payout options are available?

There are four basic payout options available once you annuitize your contract. They are:

Period certain — payments last a specific period of time. If you live beyond that time, your payments will end anyway.
Life with period certain — this pays regular payments for as long as you live. However, it also sets a specific period of time that payments will be made, and if you die before that time period is up, your beneficiaries receive the rest of the payments.
Life – this payout option guarantees payments for as long as you live. Once you die, payments end.
Joint and survivor life — payments last both for as long as you live and as long as another person (spouse or partner) lives.

What happens if I die before I start taking income?

Then your assets will pass along to your beneficiary(ies). The beneficiary(ies) you named will receive the death benefit you elected.

Taxes

How are the earnings within my annuity taxed?

Earnings within a variable or fixed annuity are tax-deferred. That means, you don’t pay taxes on them until you start to withdraw the money. At that point, you’ll pay ordinary income tax on your earnings.

How are the payments I receive from my annuity taxed?

If you have a qualified annuity, all of the principal and earnings you withdraw will be taxed at ordinary income tax rates. If you have a non-qualified annuity, just the earnings are taxed as ordinary income.

If you take partial withdrawals, your taxable money comes out of the annuity first. However, if you take lifetime income payments by annuitizing your contract, each payment you receive will be a combination of taxable and non-taxable income. This is a good way to help manage your taxes on an ongoing basis.

IRAs

Should I fund my IRA with a fixed annuity?

You can fund an IRA or other qualified plan with a fixed annuity. Especially if you are looking for the safety and predictability that you’ll find in a fixed annuity.

You should keep in mind, however, that if you are buying a variable annuity to fund a qualified retirement plan, you should do so for the variable annuity’s features and benefits other than tax deferral. That’s because qualified plans already offer tax deferral, so it is not an additional benefit of the variable annuity.

Fees

What are the fees associated with a fixed annuity and how do they work?

Although there are fees associated with fixed annuities, you don’t pay them directly. Fixed annuity fees are reflected in the interest rates credited on the contracts.

Buying an annuity

Where can I buy a fixed or income annuity?

You can purchase a fixed or income annuity through an authorized/licensed bank, broker/dealer, wirehouse or independent financial advisor.

MetLife Fixed Annuities, like all annuities, are insurance products and are not insured by the FDIC, the NCUSIF or any other government agency, nor are they guaranteed by, or the obligation of, the financial institution that sells them. All MetLife Fixed Annuity product guarantees are made solely by the issuing insurance company. The payment of principal and interest, therefore, depends solely on the issuing insurance company’s claims-paying ability and financial strength.

Withdrawals may be subject to withdrawal charges and interest adjustment. Withdrawals of taxable amounts are subject to ordinary income tax and if made before age 59½, may be subject to a 10% Federal income tax penalty.

Pursuant to IRS Circular 230, MetLife is providing you with the following notification: The information contained in this document is not intended to (and cannot) be used by anyone to avoid IRS penalties. This document supports the promotion and marketing of insurance products. You should seek advice based on your particular circumstances from an independent tax advisor.

MetLife, its agents, and representatives may not give legal or tax advice. Any discussion of taxes herein or related to this document is for general information purposes only and does not purport to be complete or cover every situation. Tax law is subject to interpretation and legislative change. Tax results and the appropriateness of any product for any specific taxpayer may vary depending on the facts and circumstances. You should consult with and rely on your own independent legal and tax advisors regarding your particular set of facts and circumstances.

Fixed annuities other than Preference Flex Select and Preference Guaranteed Select are issued by MetLife Investors USA Insurance Company on Policy Form Series 8210 (01/02) and in New York, only by First MetLife Investors Insurance Company on Policy Form Series 6210 (01/02). Preference Flex Select and Preference Guaranteed Select are issued by Metropolitan Life Insurance Company on Policy Form Series ML-FPDA (1/3/07) and ML-1210 (01/02), respectively, and are offered through MetLife Securities, Inc., New York, NY and New England Securities Corporation, Boston, MA. All are MetLife companies.

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