Life Annuity And The Type That Are Available

Life Annuity And The Type That Are Available

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The life annuity is one of the many different types of annuities you can choose in order to get a better and secure life in the future. It can be defined as an contract where the issuer makes a series of future payments to annuitant in exchange of immediate payment of a lump sum or series of regular payments. Like in other cases there are accumulation phase where the customer deposits and accumulates money into an account, and the distribution phase where customer deposits and accumulates money into an account, and pays to annuitant for a lifetime.

Some of the advantages of life annuity is that it inures against the risk of outliving your capital, payments depend on many factors such as age, gender, health, and it can be indexed. They can usually be immediate and deferred annuities. The immediate annuities can be commutable, that can be canceled and non-commutable that cannot be canceled. The deferred annuities are not available on a tax-favoured prescribed basis and they can usually be true and regular. The most important is that there are different types of life annuity and they are:

Straight life (life only) it is a great choice for those who want be sure to have enough income to sustain them for the rest of their lives. The biggest advantage is that you can create the regular income for yourself during the retirement years. It is also the less expensive choice of all other annuities. On the other side, these annuities take care of the annuitant only and cannot be provided for heirs as well.

Straight life with a guaranteed number of payments this type is much like the previous one, only that you get to pay it for arranged period of time, 5, 10, 20 years. It also has lower payout than the regular straight life annuities.

Installment refund this is a plan that allows the beneficiaries to receive a minimum amount of money after the annuitants lifetime. The thing about this annuity is that the payments continue until the entire purchase price is paid out.

Cash refund it promises to pay a lump sum of the difference between the purchase price and the amount of payments received by the annuitant. Unlike the installment refund which provides payments, the cash refund provides lump sum beneficiary. It also guarantees income for the life of the annuitant.

Joint life these are very popular types of annuities where there are guaranteed payments to spouse, partner or financial dependant after a lifetime of annuitant, and even children until the certain age.

The best thing about the annuity is that its tax-deferred, which means that tax doesnt have to be paid until distribution or withdrawal or the annuitant. All those types have a lot of benefits for annuitant, but they are all different since they are designed for different need and life circumstances. Thats why everyone who is considering to take any of the annuities plans should first thing about their preferences and priorities.

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For information, help and independent financial advice on annuity rates call our specialist team of advisers or visit http://www.annuityrates.co.uk



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