The term refers to the annuity insurance product if the buyer, also called the annuitant, is contracted to receive a series of payments over a specified period of time. This product is normally supplied by a bank or other financial institution as an insurance company. In most cases, these payments will stop after the death of the insured and the rest of the money will be lost. Sometimes there will be a co-receptor as the wife of the purchaser, in many cases, you will also receive benefits if the insured dies.
An annuity is often purchased to finance retirement or the application of a surviving spouse after death and in some cases, is furnished under a structured settlement awarded from a personal injury claim. Rents are generally two distinct phases. First is the accumulation phase during which the buyer makes payments to an account in order to create a considerable amount of money. After the contract is fulfilled, usually at the individual's death, starts the distribution phase and the beneficiary will begin collecting an agreement on the number of payments.
Why are there so many different pensions available may be difficult for consumers to find what best suits their needs. To simplify things, many of which can be classified as either fixed or variable. Fixed cost ranges of variation consistent and when there are changes in the amount is increased or decreased by a fixed percentage. In the alternative, a variable interest rate, taxes are determined by the performance of some investments, like bonds and mutual funds. These are usually selected when you try to defer capital gains tax.
In the event that the pensioner is not clear how long they can live and is anxious to hand before they can recover their investment base, you may be interested in buying a guaranteed annuity. These buyers obviously do not want to have to exit their investments, so you might be interested in signing the clause that requires them to make payments for a number of years, and if they pass in front of the period has been completed , goods or beneficiary is entitled to certain outstanding payments.
The annuity of one is another popular option that married couples generally enjoy. They are also known survivor annuity and payments will continue until both spouses have died, either in the same amount or a reduced amount, as defined in the contract. There is also a single life annuity, which is preferable for single people, they will receive payments until their death, with the rest of the money is lost and no other receptors are able to collect the remaining payments.
Before making investment decisions that can affect your retirement, you should first seek the advice of a financial agent you trust.