How do annuities work?

An annuity is a contract with an insurance company. You pay a premium either as a single lump sum or through multiple payments over time and the insurer agrees to pay you a stream of income at a future date or immediately, depending on the type of annuity. During the accumulation phase, your money grows tax-deferred. When you begin taking distributions, you receive regular payments that can be structured to last for a set period or for the rest of your life.

Are annuity withdrawals taxed in Connecticut?

Connecticut offers a full exemption on pension and annuity income for single filers with adjusted gross income at or below $75,000 and married couples filing jointly with AGI at or below $100,000. If your income exceeds those thresholds, partial exemptions may still apply before Connecticut's graduated income tax rate of 3% to 6.99% takes effect. Consult a tax professional for guidance specific to your situation.

What is the difference between a fixed annuity and an indexed annuity?

A fixed annuity provides a guaranteed interest rate for a specific term, regardless of market performance. A fixed indexed annuity links your potential interest credits to a market index like the S&P 500, but includes a floor, usually zero percent, so your principal is protected from market losses. Indexed annuities offer higher potential returns than fixed annuities in strong market years, but returns are typically capped.

Can I lose money with an annuity?

With fixed and fixed indexed annuities, your principal is protected from market losses. United Insurance Group can help you understand the risk profile of each annuity type so you choose a product that matches your comfort level.

What is the minimum amount needed to purchase an annuity?

Minimum premiums vary by carrier and product type. Some fixed annuities are available with premiums as low as $5,000, while others may require $10,000 or more. Immediate annuities typically require a larger lump-sum premium. Our agents can identify options that fit your budget.

How is an annuity different from a CD?

Both offer guaranteed returns and principal protection, but annuities grow tax-deferred, you do not pay income tax on earnings until you withdraw them. CDs are taxed annually on interest earned. Annuities also offer optional lifetime income features that CDs do not. However, annuities typically have longer surrender periods and may include surrender charges for early withdrawal.

Does United Insurance Group charge a fee for annuity consultations?

No. Our consultations are completely free with no obligation. As independent agents, we are compensated by the insurance carriers we represent, you pay nothing extra for our guidance.

Annuities | United Insurance Group

An annuity is a contract between you and an insurance company. You make a payment, either as a lump sum or over time and in return, the insurer provides you with a stream of income, either immediately or at a future date you choose. That income can be guaranteed to last for a set number of years or for the rest of your life.

For Connecticut residents approaching or already in retirement, annuities offer something that stocks, bonds, and savings accounts cannot: a contractual guarantee of income regardless of what markets do. Your principal can grow tax-deferred during the accumulation phase, and when you are ready, it converts into dependable monthly payments that supplement Social Security, pensions, or other retirement savings.

At United Insurance Group, our licensed agents help you evaluate whether an annuity fits your retirement plan, compare offerings from the carriers we represent, and walk you through every detail before you commit. There is never a charge for the consultation.

Connecticut has one of the highest costs of living in the Northeast, which makes retirement income planning especially critical. Between property taxes, healthcare costs, and everyday expenses, retirees need income sources that are reliable and protected from market downturns.

Annuities address these concerns directly. A well-structured annuity guarantees that you will not outlive your money, no matter how long you live or what happens in financial markets. For many Connecticut families, this peace of mind is worth more than the potential upside of riskier investments.

Connecticut also offers a significant tax incentive for annuity holders. If your adjusted gross income falls at or below $75,000 for single filers or $100,000 for married couples filing jointly, your pension and annuity income is fully exempt from Connecticut state income tax. Even if your income exceeds those thresholds, partial exemptions are available before the state's graduated rate of 3% to 6.99% applies. This makes Connecticut one of the more favorable states in New England for annuity-based retirement income strategies.

Beyond the tax advantages, the Connecticut Life and Health Insurance GuarantyAssociation provides an additional layer of protection. If an insurance carrier were to become insolvent, annuity benefits are covered up to $500,000 per contract owner, similar to FDIC protection for bank deposits.

When you purchase an annuity through a captive agent or directly from a single insurance

company, you only see that company's products. An independent agent like United Insurance Group is not tied to any one carrier. We represent multiple insurance companies that offer annuities in Connecticut, which means we can compare rates, contract features, surrender periods, and rider options side by side, then recommend the product that genuinely fits your situation.

Our team includes licensed life and health agents who specialize in annuity products and retirement income planning. We take the time to understand your goals, walk you through the differences between fixed, indexed, and immediate annuities, and explain every fee and contract term in plain language before you make a decision.

United Insurance Group has been serving Connecticut families and businesses from our Connecticut office since 1973. From 2011 through 2024, members of our team were consistently recognized among Connecticut's top insurance professionals by the Five Star Professional Program, as featured in Forbes and Connecticut Magazine. That track record reflects our commitment to putting our clients' interests first, a commitment that applies to every annuity consultation we provide.

How do annuities work?
An annuity is a contract with an insurance company. You pay a premium either as a single lump sum or through multiple payments over time and the insurer agrees to pay you a stream of income at a future date or immediately, depending on the type of annuity. During the accumulation phase, your money grows tax-deferred. When you begin taking distributions, you receive regular payments that can be structured to last for a set period or for the rest of your life.
Are annuity withdrawals taxed in Connecticut?
Connecticut offers a full exemption on pension and annuity income for single filers with adjusted gross income at or below $75,000 and married couples filing jointly with AGI at or below $100,000. If your income exceeds those thresholds, partial exemptions may still apply before Connecticut's graduated income tax rate of 3% to 6.99% takes effect. Consult a tax professional for guidance specific to your situation.
What is the difference between a fixed annuity and an indexed annuity?
A fixed annuity provides a guaranteed interest rate for a specific term, regardless of market performance. A fixed indexed annuity links your potential interest credits to a market index like the S&P 500, but includes a floor, usually zero percent, so your principal is protected from market losses. Indexed annuities offer higher potential returns than fixed annuities in strong market years, but returns are typically capped.
Can I lose money with an annuity?
With fixed and fixed indexed annuities, your principal is protected from market losses. United Insurance Group can help you understand the risk profile of each annuity type so you choose a product that matches your comfort level.
What is the minimum amount needed to purchase an annuity?
Minimum premiums vary by carrier and product type. Some fixed annuities are available with premiums as low as $5,000, while others may require $10,000 or more. Immediate annuities typically require a larger lump-sum premium. Our agents can identify options that fit your budget.
How is an annuity different from a CD?
Both offer guaranteed returns and principal protection, but annuities grow tax-deferred, you do not pay income tax on earnings until you withdraw them. CDs are taxed annually on interest earned. Annuities also offer optional lifetime income features that CDs do not. However, annuities typically have longer surrender periods and may include surrender charges for early withdrawal.
Does United Insurance Group charge a fee for annuity consultations?
No. Our consultations are completely free with no obligation. As independent agents, we are compensated by the insurance carriers we represent, you pay nothing extra for our guidance.

Annuities in Connecticut - Guaranteed Retirement Income You Can Count On

What Is an Annuity and How Does It Work?

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Types of Annuities Available Through Our Agency

Fixed Annuities

Fixed Indexed Annuities

Immediate Annuities

Why Connecticut Residents Are Turning to Annuities

Connecticut Annuity Tax Advantage

The Independent Agent Advantage for Annuity Shopping

Frequently Asked Questions About Annuities in Connecticut