Home  Annunity Life Insurance
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ANNUITIES Overview |
An annuity is a product which can provide you with
an income for as long as you live.
There are two types of annuities:
Immediate annuity:
The first is when you pay a lump
sum to a life insurance company, and they pay it out to you right
away in periodic installments. This type is known as an immediate
annuity - the payments to you start immediately.
Deferred annuity:
The second, and more common, is where money paid by you is accumulated
at interest over a period of time. If you choose, the accumulated
amounts will then be paid out to you in periodic installments, usually
when you retire, in order to supplement your retirement income. This
type is known as a Deferred Annuity - the payments
to you are deferred for a number of years. Currently, a deferred annuity
may have tax advantages, in that the interest credited to your funds
is deferred from current taxation. That is to say, income tax is not
owed until you start receiving distributions from the annuity. Both
types of annuities offer you certain options for receiving your income.
It is usually paid to you monthly. The most common options are:
Life Annuity - The company will pay you an income
for as long as you live.
Period Certain Annuity - The company will pay you
an income for a specified amount
lf time (5 years,
10 years, 20 years, etc.).
Life Annuity with Period Certain - The company will
pay you an income for as long as you live, but if you die before the
period certain that you choose, the income will be paid to a survivor
you designate until the end of that period.
Joint and Survivor Annuity - The company will pay
an income to you during your life, and after your death will pay a
percentage of that income (50% or 75%, for example) to a survivor
you designate during, his or her life.
Annuity life insurance
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