Numerous articles, papers or writings of experts on annuity has been widespread in various media. Nevertheless, the author tried to summarize everything that is related to annuity activities in Indonesia. From various sources, the survey results and ask the experts, the authors try to discuss thoroughly the development of the annuity in Indonesia.
According to Big Indonesian Dictionary, is a series of annuity payments or receiving the same amount, to be paid or to be received at the end of each period the same period of time for a certain number of years. Annuities are contracts in which insurance companies provide regular payments in return for the premiums you paid. Annuities are generally purchased for retirement income.
An annuity is a contract in which an insurance company makes a series of income payments at regular intervals in return for a premium or premiums you have paid. Annuities are most often bought for future retirement income. Only an annuity can pay an income that can be guaranteed to last as long as you live.
Annuities have benefits in every situation:
For people who are rich, buy an annuity to secure future income, even if their assets are missing. They get the certainty of income.
For people with modest wealth, annuities can help provide a sustainable source of income so that it remains financially independent in the old days. In addition, they will be free from the hassles of managing investments and assets.
There are many categories of annuities, which can be classified according to the nature of the underlying investment, the accumulation period, the nature of commitment and payment of premium setting.
The nature of the underlying investments: fixed or variable annuities
Fixed annuities have a certain interest rate, similar to a bank Certificate of Deposit (CDs). In a fixed annuity, the insurance company guarantees the principal and minimum interest rate. In other words, provided a good insurance company financially, the money you invested in fixed annuity will grow and not decline in value. Growth in the value of the annuity and / or income paid may be fixed in dollars or particular interest. Growth in the value of the annuity does not depend directly on the investment performance of insurance companies that support the annuity. Some fixed annuities provide a higher interest rate than the minimum if the actual investment, expense and mortality experience of the company better than expected.
If you buy a variable annuity, your money can be invested in investment instruments multilevel return is not fixed, especially in mutual funds. The value of your money in variable annuity and the amount of money to be paid to you depends on investment performance after deducting the cost of managing those funds. To provide certainty, the insurance company can provide assurance that funds your annuity will never fall below a certain value.
Period of accumulation: the deferred annuity (deferred) or immediately (immediate)
Deferred annuities have a period where the premiums and investment returns are accumulated prior to the periodic payments. Accumulation period can be very long, such as deferred annuities to fund retirement that lasted for decades until the employee reaches retirement age.
Annuities begin paying regular income one period after the annuity is purchased.Period that depends on how often the income will be paid. For example, if the income is monthly, first payment made one month after the immediate annuity is purchased.
The nature of the commitment of payment: fixed period annuity, a fixed amount, or lifetime
Fixed period annuity pays income for a specified period, for example ten years.The amount of income paid does not depend on the age or the sustainability of life of people who buy annuity (called anuitan). The amount of income paid depends only on the premium paid into the annuity, the length of time of payment, and the accumulated investment returns. Annuities provide a fixed amount of income in a certain amount until the balance of premiums and investment returns are paid out.
Lifetime annuity provides income for the remaining life of anuitan. A variation of lifetime annuities continues to provide income for up to two pairs anuitan died (joint-life annuity). The amount paid depends on age anuitan, premiums paid into the annuity, and investment returns are accumulated.
Types of lifetime annuities are used as retirement benefits in Indonesia (as in civil and military) generally provide periodic payments every month until the lifetime of the main participants, then proceed spouse (widow / widower) of 60% of the monthly benefits of a major participant, then down to son for 33.33% of pension benefits widow / widower of a maximum of up to three children who have not reached the age of 25 years, unmarried and has not worked.
In a lifetime annuity, a source of income comes from three "wallet": Your investment, investment earnings and money from a pool of people in your group who died first from you. This is a typical setting on the annuity, which allows companies to guarantee the annuity income for life.Premium payment arrangements: a single premium annuity or flexible premium
Single premium annuity funded by a single payment. Single premium annuity can be deferred or immediate. Most single annuity pension funded from savings due to the Pension Fund (Pension Fund). If you joined as a participant Pension Fund, at the age of your pension, your pension balance 80% will buy a single premium annuity. Periodic payments from an annuity is tax free because it is considered as an insurance benefit.
Flexible premium annuity is an annuity funded by a series of premium payments.Deferred annuities are always flexible, which is designed to have sufficient time period to accumulate premiums and investment income before the money can be paid regularly.
An annuity can be classified in several categories at once. For example, an annuity purchased from the disbursement of pension annuity maturity date is fixed, single-premium life-soon. That is, the annuity is funded from a single premium, are invested in fixed-income investment instruments and the payment of immediate benefits for the next month until anuitan lifetime.
The terms annuities Indonesia
annuity
one way of periodic payment obligations for a certain period (annuity)
perpetual annuity
annuity with an indefinite term (perpetuity)
simple annuity
annuity with a period or a premium rate that coincides with a period
periodical payments (simple annuity; ordinary annuity)
annuities are not-unexpected
annual payment frequency or time period when payment is made
uncertain events occur (contingent annuity)
annuity be delayed
annuity with payments that will start at a certain time in the future (deferred annuity)