| Annuity Information | ||
| & Annuity Quotes | ||
| www.AnnuityPolicy.com | 800-514-2100 | Home / Add to Favorites / My Account / Contact Us |
| STRAIGHT LIFE ANNUITY | |
|
There are various annuity settlement options, with one of the simplest options being a straight life annuity. In most cases, this type of annuity is a fixed annuity. Therefore, your payments will remain the same for the duration of the annuity contract. You also won’t need to designate a beneficiary, as straight life annuities don’t include any death benefits. With a straight life annuity, your contract payments will continue until you die once the annuitization phase begins, regardless of your age. Given that the amount of each payment is determined at annuitization, you may end up receiving a lot more money than by investing your money and making frequent withdrawals if you live longer than expected. However, the reverse is also due; if you die prematurely, the payments may end up being a lot less than your original purchase payment. |
|
| Advantages | |
|
|
| REFUND LIFE ANNUITY | |
| If you purchase a refund life annuity, also known as a life income with refund annuity, you will continue to receive payments for the rest of your life, just like a straight life annuity. However, the difference is that with a refund life annuity, your insurance company will guarantee to pay you an amount that is at least as much as the amount of the contract purchase price you paid. Therefore, if you happen to live for a long time after you start to receive your annuity income payments, you may end up receiving much more in benefits than what you originally paid. Regardless, you know that you will receive at least the original amount you paid. | |
| Refund Life Annuity Payment Options | |
|
If you end up dying before the equivalent amount of your purchase price has been paid, the beneficiary you have designated will receive the difference in instalment payments or cash. A common type of refund life annuity is called an installment refund annuity. In this case, your insurance company will continue to make payments for the rest of your life. If you happen to die before the minimum number of years for the payout, your insurance company will continue to pay until the designated time period has expired. The second type of refund life annuity is a little different. If you die before you receive the minimum number of payments or before the specified time period expires, the premiums will be refunded to your beneficiaries. This can be a suitable option if you are physically fit and not suffering from any major health problems. The disadvantage with this option is that you will receive lower periodic payments than what you would receive from a simple annuity contract without a refund option. |
|
| Who Should Consider A Refund Life Annuity | |
|
|
| LIFE ANNUITY CERTAIN | |
|
Given that there are various annuity settlement options available, it may be difficult to decide which one is right for you. However, if you like certainty and order in your life, you may want to consider purchasing a life annuity certain. Unlike other annuities, this type of annuity will guarantee you a minimum number of payments, regardless of whether you are alive. The most common guaranteed payment time periods are 10, 15 or 20 years. If you live beyond the time period during which the minimum guaranteed payments have been issued, you will continue to receive income for the rest of your life. On the other hand, if you die within the guarantee period, the balance of income instalments owing to you will be paid to the beneficiary you have designated in your annuity contract. Many life annuity certain contracts are for ten years, as this is the average life expectancy of males who retire when they are 65. This means that you are guaranteed to receive income payments for at least ten years. In this scenario, if you start your payments at age 68, they will continue until you turn 78. If you die when you are 70, after only receiving two years of payments, your beneficiary will continue to receive payments for the remaining 8 years. These are referred to as “certain installments” and the ten-year period is called the “certain period”. If you live more than the specified ten years, you will continue to receive payments for the rest of your life. However, there will be no money paid to your beneficiary when you die. If you are unsure whether you should choose a straight life annuity, refund life annuity, life annuity certain, temporary annuity certain or joint life annuity, be sure to talk to a financial advisor or your insurance company.They will help you determine the best option to suit your particular situation. |
|
| JOINT LIFE ANNUITY & JOINT & SURVIVORSHIP ANNUITY | |
|
With most annuities, your payments end when you die. This means your beneficiaries will not receive any money upon your death. Fortunately, that is not the case with a joint life annuity, also known as a joint and survivorship annuity. You and your spouse will both continue to receive a set monthly amount until one of the annuitants dies. At that point, the surviving spouse will receive an amount equal to or lower than the specified amount for the rest of his/her life. This can provide you with peace of mind that neither you nor your spouse will be left without any income if one of you dies before the other. For a married couple, you will both receive annuity income when you are alive. If one person dies, the surviving spouse will continue to receive payments, although they may be of a lower value. Many people choose to purchase a joint life annuity because it guarantees that the surviving spouse will receive an annuity income for the rest of his/her life. There are quite a few options available with a joint life annuity or joint and survivorship annuity. If you purchase a joint life with last survivor annuity, your spouse will continue to receive payments after you die with no conditions. This type of annuity also enables you to designate other beneficiaries to receive payments if you die unexpectedly. Yet another option is to specify that beneficiaries will receive lower payments when you die. You can choose three options for a joint survivor annuity: joint and 100 percent survivor, joint and two-thirds survivor or a joint and 50 percent survivor. In the first case, the surviving spouse would receive the same monthly payment as they did when both annuitants were alive. In the second case, they would receive two-thirds of the amount, and in the last case, they would only receive half of the specified monthly payments upon the death of one of the annuitants. Most married couples choose the second or third option, since the surviving spouse will have lower living expenses. The main advantage of a joint life annuity is that you can be guaranteed that your spouse will receive income after you die. Given that the payments are made regularly, rather than in one lump sum, your spouse will also not have to suffer large tax burdens. The principal disadvantage of a joint life annuity is the high cost. They cost much more than other types of annuities because of the additional insurance component. |
|
| TEMPORARY ANNUITY CERTAIN | |
|
You have various choices when it comes to determining how your annuity will be paid and what happens when you. These are called settlement options, and you need to select one when you purchase any type of annuity. Given the numerous choices, it can be confusing to determine which one is best for you and your family. For example, if you purchase a life annuity certain, income payments will continue for the rest of your life if you outlive the specified time period stated in your annuity contract. However, with a temporary annuity certain, the situation is very different. As the name implies, the annuity is only certain for a temporary period of time. Therefore, if you happen to live longer than the payment period specified in your temporary annuity certain contract, your payments will discontinue one the designated time period elapses. In other words, the annuity is only payable for a set dollar amount or time period, regardless of whether the person who purchased it dies or not. Your insurance company will guarantee to issue you payments for a specific number of years when you purchase a temporary annuity certain. If you happen to die before you receive payments for the entire time period specified in the contract, the beneficiary you have designated will continue to receive income payments for the time period left. The reason is that the income is guaranteed by your insurance provider. The standard time periods for a temporary annuity certain are 10, 15 or 20 years. The main advantage of a temporary annuity certain is that your insurance company will guarantee to either make a set number of payments or a specified total dollar amount to you and your beneficiary (if you designate one). The main disadvantage of this type of annuity is that there is a possibility that you may outlive your payments and be left without any income after you retire. |