What is an Annuity?

An annuity is a series of payments made at fixed intervals of time. It can help you avoid running out of money till you live. Let’s look at some of the facts you should know about annuity:

WHY TO CONSIDER ANNUITY:

1. Hedge against markets: Regardless of the ups and downs of the financial markets, you can be confident that your income from annuity is locked in and guaranteed. Additionally, with this product you set aside a reasonable part of your assets to help cover future living expenses. Monthly income checks, should you choose this payment option, make it easier for you to stay on budget, and to ensure your basic needs such as food, housing and health care are covered.

2. Managing risk of living long: With growing life expectancy, managing risk of living long is a challenge, particularly when we are moving from joint family system to a nuclear family system.

HOW TO CHOOSE ANNUITY:

1. Choose the right structure: While zeroing on the right annuity to buy, you need to answer two questions – what kind of income you would require, whether you would like to redirect the proceeds to your spouse/children/grandchildren upon your death.

2. Choose the right annuity: There are number of annuity options to suit your needs in the market like:

  1. Single Life : Lifetime Annuity with Return of Purchase Price in parts

  2. Single Life: Lifetime Annuity with Return of 100% of Purchase Price on diagnosis of critical illness or Death

  3. Joint Life: Last Survivor with 100% annuity to secondary annuitant and return of 100% of Purchase Price

  4. Single Life: Lifetime Annuity with Return of Purchase Price

  5. Single Life: Lifetime Annuity

BENEFITS OF CHOOSING ANNUITY

1. Guaranteed monthly Income: An income annuity can help protect against the risk of outliving your savings. No matter how long you live, you will always have the security of knowing that you have a regular monthly income. The amount you receive each month is guaranteed, and payments will continue for as long as you live.

 

Tax Definitions:

 

Related Articles:

comments powered by Disqus

Did you know ?

Re-Insurance

Reinsurance is an insurance that is purchased by an Insurance company from one or more other insurance companies to manage the risk. Reinsurance helps in transfer of risk from one insurance company to another. It is also called “insurance for insurers” or “stop-loss insurance”.

 Read More

View All