Life Insurance Annuities – Compare Rates And Get Free Quotes
You’re not growing any younger, and securing a financial future for you and your family when you’re older or when you’ve retired is your life goal as of the moment. Achieving exactly that can be done by securing life insurance annuities.
Life insurance annuities are a kind of contract from your insurance company or the issuer wherein the issuer makes a series of payments in the future to the buyer or annuitant in exchange of a single premium payment or a series of regular payment of premiums.
Basically, life insurance annuities features predetermined payments to annuitants until their time of death unless there are other beneficiaries for the annuity. Otherwise, the annuity will stop automatically.
The main goal of life insurance annuities is to help people who are planning to retire to budget the remaining money that they have. They help people balance and manage their finances especially when they do not have monthly paying jobs anymore.
Life insurance annuities are usually paid by the annuitant monthly during the time when they are still working. Although they can also buy life insurance annuities in one lump sum which is easier for some people. When the retirement of the annuitant begins, this is when the company begins to make monthly periodic payouts, assuring annuitants of a steady flow of income when they retire. This will make buyers feel more secure and more protected financially.
Life insurance annuities are a form of longevity insurance. Since there is an uncertainty for people after retirement on how they should go about everyday with limited resources. This uncertainty falls in the responsibility of the insurer. The insurer then becomes the one who provides for an income for those individuals after retirement.
There are two phases for life insurance annuities:
1. Accumulation phase: The phase wherein the buyer or annuitant deposits, pays and accumulates a certain amount of money into their personal accounts
2. Distribution phase: The phase wherein the insurer is responsible of giving out income payouts to the annuitant until their death or for other beneficiaries named in the contract.
As life insurance annuities are a complex kind of insurance to deal with, the selection of proper policy is a complex process to choose from as well. The choice of the type of annuity of course depends on the individual’s circumstances.
Here are the two most common types:
1. Fixed annuities: Annuities that are paid in fixed amounts or the amounts that increase by a fixed percentage.
2. Variable annuities: Annuities that pay amounts depending on the investment performance of a specific set of investments.
Life insurance annuities with a single premium or immediate annuity, the buyer or the annuitant pays with a single lump sum. Then the annuity starts to pay off within a year.
The advantage of life insurance annuities is that this will replace the monthly wages of the retiree or the annuitant. This will come out as a guaranteed income for life having the insurer be responsible of applying the payments on specific terms until the death of the annuitant or for any other beneficiary in that matter.
Although the disadvantage may come with future inflation, then the specific amount you get from annuity may not be more than enough to meet your comfortable life. Either way, this process will be better than having nothing at all.