Understanding MYGAs Video Course

How Do Multi Year Guaranteed Annuities (MYGAs) Work? Annuities can be complicated. Our free and quick video series makes them easy to understand. Learn how a MYGA fits into your retirement plan. Or enroll in the interactive online course with virtual quizzes on our consumer-friendly education center.


What Is an Annuity?

An annuity is, very broadly speaking, an insurance product that can help turn your savings into an income stream and make your financial plans during retirement more predictable. An annuity is a contract between you and an insurance company. You make a lump sum payment, or give the carrier a series of payments, and in return, you obtain regular payments at some point in the future.


What Is an FIA and a MYGA?

A fixed annuity is an accumulation product offered by an insurance company that is tax deferred as long as the money used is non-qualified. Fixed annuities provide a guaranteed rate of interest for a specified period of time, which may appeal to individuals with a low risk tolerance, and those who want certainty about what rate they can earn for a period of time.


What Happens at the End of the Period?

Fixed annuities have defined guaranteed interest periods. During the guaranteed interest period, the insurance company will credit a guaranteed rate of interest on your contract value for a set period of time. Insurance companies typically offer guaranteed interest periods between 3 and 10 years, but some offer many more options.


Can I Get A Refund?

Depending on the state you live in, after purchase, you will have between a 10 and 45 day period with some limited exceptions, known as the free-look period, to further review your financial decision and ensure it’s the best option. If you decide to change your mind during this period, you can return the contract and receive a complete refund without penalty.


How Can I Withdraw Money?

You can withdraw money from your annuity at any time. It’s important to note, however, that withdrawing money from your annuity early may result in surrender charges, a negative or positive market value adjustment (MVA), pro-rated fees, or less interest credited to your contract.


How Do Multi Year Guaranteed Annuities (MYGAs) Work?

While you are encouraged to avoid withdrawals until your annuity has completed its surrender period, withdrawals are permitted under certain circumstances without incurring a surrender charge. Surrender charges are assessed if you choose to take a withdrawal in excess of any free withdrawal amount allowed under your contract.


How Do Multi Year Guaranteed Annuities (MYGAs) Work?

Many annuity contracts contain an adjustment for changes in market conditions that applies when you withdraw money. A market value adjustment, or MVA, is an increase or decrease in the amount of money you receive when you take a withdrawal in excess of the free withdrawal amount, or fully surrender your contract.