Life Annuity - A Splendid Way To Earn After Retirement
If you are planning for retirement, a life annuity can be a wonderful alternative to go for
. Its just a financial contract like the one done in an insurance premium. Here the annuity provider or the financial institution provide future payments in parts to the annuity applicant in return for a lump sum which is to be paid instantly by the buyer. The buyer may also go for a series of regular payments. Its one of the greatest options for retirees. In fact, plenty of retirees are going for life annuities instead of typical pension schemes.
There is no time period set by the annuity agent and the duration is completely based on the expiry date of the applicant. If the applicant expires, the terms and conditions of the contract will come to an end. Hence, the remaining accumulated fund gets forfeited if there is no mention of any annuitant or beneficiary in the contract. So, a life annuity can always be treated as a long-term insurance where the unsecured aspect of the individual's lifespan gets transferred from the applicant to the insurer. In short, annuities serve among the perfect options for providing steady income during retirement.
There are various sorts of life annuity schemes. Prior to choosing such schemes, make sure you go through each and every aspect. First chalk out the advantages of that particular scheme which you are opting and then go for the ideal option. Now lets have a look at some of the life annuity schemes:
Fixed and variable annuities With the help of such life annuity schemes, you can also make payments in fixed amounts that rise by a fixed percentage. Variable annuities help to make payments that vary according to the applicant's investment performance. Fixed and variable annuities can be put to use for accomplishing various objectives. Various funds are also offered under this life annuity scheme that allows investors to access between sub-accounts and that too without any additional fees or sales charges.
Guaranteed Annuities As already mentioned, if an annuitant dies, his remainder gets forfeited. To avoid this forfeiture, retirees go for Guaranteed Annuities. Its one of the best
life annuity schemes that saves his own accumulated money from getting forfeited. The applicant however need to make annuity payments for at least a particular period.
Joint annuities The joint annuities scheme includes joint-life and joint-survivor annuities. Here the payment usually stops on the death of one or both annuitants respectively. For instance, couples mostly opt for joint annuities and the payments stop if the second spouse expires. On the other hand, joint-survivor annuities reduce the payments of the second annuitant after the first applicant expires.
One of the biggest advantages of a tax deferred annuity is that which is extracted from the privilege of tax deferral. Apart from tax deferral, a tax deferred annuity ensures the annuitant to enjoy a steady income for the rest of his life. All the schemes under tax deferred annuity are designed with full-proof guarantee thereby assuring the holder with a healthy income. To know more on
tax deferred annuity, you can either contact an expert or visit relevant websites.
by: Simon Cronje
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