Annuity Plan: Retirement Planning

An annuity is a contract between an individual (the annuitant) and an insurance company. The annuitant makes a lump-sum payment or series of payments to the insurance company. In return, the insurance company agrees to pay the annuitant a fixed sum of money at regular intervals for a set period of time, or for the remainder of the annuitant’s life. These payments can begin immediately or after a specified deferral period.

Does Annuity make sense?

An annuity is a contract which assures a person a fixed amount paid for the rest of life. Most people compare Annuities with prevailing FD rates in the market and find low rates offered. But they forget that FD rates are not constant throughout life. As a country grows, the rate of interest provided on the FD goes down. So, a one-on-one comparison does not make sense. People should look at the rate of interest charts, which ten years ago offered a 12% rate, and then compare it with today, which is close to 7.5%

Guaranteed Income in Retirement:

• Fixed Rate:

• An annuity offers a guaranteed rate of return, locked in at the time of purchase. This ensures a predictable income stream throughout your retirement years.

• Retirement Security:

• Annuity payments guarantee a reliable source of income within your retirement corpus.This fixed income helps cover your living expenses in your golden years, fostering financial independence.

You can make your partner part of the Annuity; they would get the same sum when they are alive. The money you use to buy an annuity can provide your progeny with a legacy in the form of guaranteed income payments after you’re gone.

It makes sense to invest in annuities and park some funds.

What are the different times of Annuity?

Immediate Annuity

We do not have any accumulation phase in this, but the person directly starts benefiting from the Annuity. These are the most popular plans.

Deferred Annuity

Another popular plan is deferring the Annuity by a few years compared to the immediate Annuity; the rates offered are higher at the time of postponement.

Options available

Single Life Annuity with Return of Premium:

• You receive a guaranteed fixed income stream each year.
• Upon your passing, the sum of money you originally invested is paid to your designated beneficiary.

Single Life Annuity without Return of Premium:

• You receive a higher fixed income payout compared to the return of premium option.
• However, there is no death benefit paid to your beneficiary after you pass away.

Joint Life Annuity with Return of Premium:

• Both you and your spouse receive a guaranteed fixed income stream for as long as either of you are alive.
• After both you and your spouse pass away, the original premium amount is returned to your designated beneficiary.

Joint Life Annuity without Return of Premium:

• Both you and your spouse receive a guaranteed fixed income stream for as long as either of you are alive.
• There is no death benefit paid to your beneficiary after both you and your spouse pass away.

Annuities for Retirement Planning:

Carefully consider your needs and retirement timeline when choosing an annuity. They can be a valuable tool for securing your financial future.

We Can Help You Find the Right Annuity:

Only a limited number of insurance companies offer annuity products. We can assist you in finding the solution that best suits your needs. Contact us through our website or mobile number for more information.