Types Of Annuities Available

Types Of Annuities Available

Types Of Annuities Available

The buyer either pays a premium at one single time or through regular timely payments and after a period of time the usually after retirement the insurance company makes regular payments to the buyer. So in other words through annuities one can guarantee a steady income after retirement. The payments continue through the lifetime of the buyer and stops only at his/her death. In case a provision for beneficiary is done then the payments will continue till the beneficiary dies. If the buyer and his/her beneficiary before the accumulate funds is exhausted then rest of the money is forfeited. Thus the uncertainty of an individual's life is transferred to the insurance company.

Why should you buy annuities? Well annuities offer some major advantages over other savings plans. Firstly your money is safe from economic downturns or market disruptions. You are guaranteed an income irrespective of any crisis in the financial world. Secondly, your interests are not taxed till the time of withdrawal which means you can build up a tidy nest egg in the meantime.

Thirdly, annuities have been known to outperform all other types of deposits. Fourthly, annuities offer greater penalty free access to your money than other savings plans. It even offers life benefits which include complete access to all your money in case you are confined to a nursing home or diagnosed with terminal illness or unemployment. Here are some of the different types of annuities on the offer.

1 Fixed annuities - This kind of annuity offers a fixed amount as payment or the amount increases by a fixed percentage.

2 Variable annuities - In this kind of annuity the amount of payment varies according to performance of investments.

3 Guaranteed annuity - Annuity payment is usually done for an unknown period of time till the buyer dies. What happens if the buyer dies before utilizing his original investment? It can be forfeited by the insurance company. To prevent forfeiture, guaranteed annuity can be bought. In this type of annuity the insurance company has to pay for a certain period of time which is specified. If the buyer lives beyond that time frame the payments continue till his death. If the buyer dies before that time the payments are done to his beneficiary.

4 Joint annuities - In case of joint life or joint survivor annuities the payments stop with the death of the joint beneficiaries.

5 Impaired life annuities - In this type of annuity the terms of offer improve as a result of medical diagnosis. The ranges of qualifying conditions have increased in recent years.

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