subject: Annuities - The Facts [print this page] Annuities - The Facts Annuities - The Facts
Annuitiesare used in conjunction with a defined contribution type of Pension. In other words a pension that you make contributions to.
Annuities are investment products used to convert your Pension fund into an income.
AnIndependent financial adviser can give you an in depth insight when it comes to this type of investment, but here is an overview of howthey work....
A Lifetime Annuity
The idea with a Lifetime Annuity is that you will use the benefit amount of your Pension to purchase a Lifetime Annuity from an Insurance company.
Your Lifetime annuity will then pay out an Income for the remainder of your life. Each Lifetime Annuity can be different and will pay income monthly, quarterly, half-yearly or yearly.
The Amount of income your Lifetime Annuity pays can remain at the same level or you can choose for it to increase over time, protecting your Annuityagainst rises in the cost of living.
The amount of income paid out by your Lifetime Annuity will depend on the size of the Pension fund you have and also the rate which your Lifetime Annuity offers.
Impaired Life Annuities
Impaired Life Annuities work in a very similar way to a Lifetime Annuity and would pay out an income for the remainder of your life.
The difference being that Impaired Life Annuities are designed to pay out a higher income to people suffering from named medical conditions which will reduce the person's life expectancy.
Illnesses which may be covered bythis type of investmentoften include Heart conditions, specified types of cancer, High Blood Pressure and diabetes. Please note that Impaired Life Annuities differ and it is essential to research what you would and would not be coveredfor. An Independent Financial Adviser can do this research on your behalf and make sure your needs are met
Many of the companies who offer Impaired Life Annuities will only accept business from people using an Independent financial adviser.
When it comes to your retirement you cannot be too careful.
When it comes to your retirement you cannot be too careful. Find an Independent financial adviser in your area with a reputation for excellence
