Understanding Lifetime Annuity

By Author: Mike Anderson
Total Articles: 32
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Lifetime annuity is indeed a great investment which is going to provide investors with the retirement earning. While the investors made a good investment that is going to fetch them the most excellent annuity rate, that, in combination with public security, company retirement fund or other earnings, will offer them an extremely pleasant income whilst they are not employed. Acquiring a good post retirement earning needs a good planning and individuals cannot hurry in such investment. The most excellent time to begin thinking, planning and investing on the correct type of annuity plan is while the individuals are young and working.

What are life-time annuities?

Lifetime annuity is a contract of individuals with the insurance providers. This contract between the duos specifies that the investor will give the insurance providers a certain amount of money regularly and in return after a definite time span the insurance company will pay back the amount along with an added interest rate. Lifetime annuities are mainly well-liked as these are assured for the entire life of holder of the annuity. ...
... However lots of individuals opt for annuities of shorter term period as the annuity rate of those are higher.

What are the different types of annuities?

There are lots of different kinds of annuities. Few of these annuities have fixed rate of interest, or earnings, whereas others rely on many other entities such as the stock market. Annuities can be availed both for shorter and elongated time period depending on the purpose for which you are availing the annuity. The annuity rate varies accordingly as well.


While the providers of insurance or annuity obtain funds from their customers they make investment with that money in spite of leaving that money idle, relying on the kind of product bought. Annuities with fixed rate are invested in commodities like bond accounts and disbursement is done at the advertised appreciation rate. In simpler words, they enhance in the value with the accumulation of the interest from that investment. In such case what the insurance company has said them at the time of contracting as the payment rate is what they will obtain.

Fixed rate annuities are better than changeable ones

The changeable rate of some annuities make these investments riskier several times as the rate remunerated is going to vary relying on whether that investment has lost or made money. The investment of money may have more probability of earning profits as well as it has the possibility to get lower returns. But in case of fixed rate the risk is zero. Lifetime annuity enjoys fixed rate of interest as the result individuals never incur loss by investing in such annuity. Furthermore this kind of finance has bonus fees too. Many insurance providers give a minimum fixed rate of interest regardless of the return on that investment which absent in case of annuities with variable interest rates.


There are several advantages too when someone avails such investments in annuities. Individuals get a certain amount of tax deduction when they invest on annuities. Some of the annuities are transferable as well.