Life annuities offer a guaranteed income stream for the life of the annuitant. Life annuities are typically funded with a lump sum payment. A life annuity pays a pre-determined periodic payment (monthly or annually) to the annuitant until there death. At death, payments will usually discontinue.
The income stream to the annuitant is based on age, gender, health, premium, and the annuity payout option. An annuitant can choose a lifetime payment option, which pays an income stream to the annuitant for the rest of their life. Under this option, when the annuitant passes away payments will stop. This option provides the largest stream of income.
If the annuitant selects a guaranteed term or period to receive income payments, assuming the annuitant dies prior to the term being reached, the annuitants designated beneficiary will continue to receive the balance of payments due. This payout option can be selected with a lifetime payment with a guaranteed period or term. This allows the annuitant to secure a guaranteed lifetime income, while hedging against the risk of an early death and securing the remaining income for a surviving spouse.
A life annuity is most effective for an individual who is interested in a guaranteed income for the rest of their life, and may be worried about outliving their savings. By utilizing a life annuity an individual transfers the risk of outliving their savings to an insurance company.
There are a number of ways to structure an annuity. It is important to have all the facts and to understand the benefits of each. To learn more about what type of annuity is appropriate for you call us at (877) -579-9575 or request an annuity quote from one our professional advisors today.
