Annuities
Annuities are insurance products, where-in you can invest a lumpsum amount, and
in turn the insurance company pays you monthly payments for the rest of your
life. The payments are gaurenteed by the insurance company and will never
runout, as long as the insurance company is solvent. Annuities are available as
level payments and increasing payments.
Level
payments:
The level payment options pay you constant amount and will not increase over
time.As a result the payments may end up as being inadequate during the later
years of your life due to cost of living increase.( you may have to continue to
save).
Increasing payments:
In the increasing payments option, the payments are increased upto 3%,(depending
on insurance company, you choose) with change in consumer price index.
Single life annuity with 10-year certain:
This annuity is paid to you until your life, additionally,if you die within 10
years of the start of your annuity, your beneficiary will receive the payments
for the remaining portion of the 10-year period.
100% joint and survivor with cash refund:
This annuity is paid to you or your spouse until both of your die. When either of you
die, 100% of monthly payments will be paid to you or your joint annuitant. Additionally, if you (and your joint annuitant) die
before receiving enough payments to equal to the amount of the account balance
used to purchase the annuity, your designated beneficiary will receive a cash
refund equal to the difference between the sum of the payments made and the
annuity purchase price.
100% joint and Survivor:
This annuity is paid to you or your spouse until both of your die. When either of you
die, 100% of monthly payments will be paid to you or your joint annuitant.
50% joint and Survivor with cash refund:
This annuity is paid to you or your spouse until both of your die. The monthly payments will be reduced by 50%
to you or your joint annuitant
when either one of you die. Additionally, if you (and your joint annuitant) die
before receiving enough payments equal to the amount of the account balance
used to purchase the annuity, your designated beneficiary will receive a cash
refund equal to the difference between the sum of the payments made and the
annuity purchase price.
50% joint and Survivor:
This annuity is paid to you or your spouse until both of your die. The monthly payments will be reduced by 50%
to you or your joint annuitant
when either one of you die.
Single life annuity with cash refund:
This annuity is paid to you until your life, additionally,if you die before
receiving enough payments equal to the amount of the account balance used to
purchase the annuity, your designated beneficiary will receive a cash refund
equal to the difference between the sum of the payments made and the annuity
purchase price.
Single life annuity:
This annuity is paid to you until your life, and the payments stop afterwards.
Annuities come in several optional forms of payment: