What Is A Modified Guaranteed Annuities?

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May 29, 2013

David Racich

A modified guaranteed annuity (MGA) is a deferred annuity that guarantees principal and a rate of interest credited to deposits for a fixed time period, some up to up ten years. Any early withdrawals from or surrender of an MGA before the expiration period will more than likely be subject to a market value adjustment, a possible withdrawal charge and exposure to ordinary income taxes. These types of annuities are hold positions and should not be purchased if liquidity is a high priority of the saver.

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