Types of Annuities
These are the combination of annuities and most common payment options:
- Simple Living Annuities
Pay a monthly, quarterly or annually, as long as you live. The amount of the payments are calculated based on the estimated life expectancy. If you die prior to reaching the estimated life expectancy, the insurance company will keep the money in the years that it would lack life. Conversely, if you exceed the estimated life expectancy, the company pays more time.
- Annuities in life or for a specified period
This annuity pays for life or for a specified number of years. For example, if you fixed payments for fifteen years and died before that time, his heirs shall be responsible for the remaining money. If you live longer than those fifteen years, will receive benefits for the rest of his life. However, if you die in the sixteenth year, his heirs will receive nothing.
- Survivor Annuity (Joint and Survivor)
This type of annuity paid for life to you and another beneficiary. The size will determine how much your account given to another beneficiary. The more you let the other beneficiary, the lower your mind while you are alive.
If you eventually purchase annuities:
- Research. Make sure that the reputation of the insurance company is sound. Some fees can be steep. Do not pay more than 2 percent. Commissions and surrender charges for changing type of annuity could take advantage of your investment.
- Compare costs. Costs between companies can vary for the same amount of revenue. It may be cheaper to buy a life insurance policy, if the money for other beneficiaries is substantial. If you are concerned about payment for services or nursing home care, may end up investing in a long-term insurance
- Do not mix investment 401 (k) and annuities. You may lose the benefits of deferral.
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