If you have a lump sum and need to guarantee yourself a consistent stream of income, you might want to consider a payout annuity. Here are a few considerations that can help you determine the payout annuity that fits your needs and circumstances. Would you like a safe and steady income for the rest of your life? Then a Life Annuity may be for you. Would you like to know that you will receive a safe and steady income for the rest of your life, combined with the knowledge that the income will continue for a minimum number of years? Then a Life Annuity with a Guaranteed Term may be more appropriate for your needs. Would you like to ensure that your spouse or another individual continues to receive payments after you pass away? Then talk to an advisor about a Joint and Last Survivor Annuity, with or without a guaranteed term.
Description of basic common Annuity Products
Income Payments: The payments you receive are made up of interest and principal and are determined based on:
- Your age (and in certain cases your spouse’s age)
- Current interest rates
- The length of time the payments are guaranteed
- The amount of money used to purchase the annuity
- Normally, payments are fixed, but if you are concerned about inflation, you may choose to have your annuity payments increased by a fixed amount each year.
Life Annuity: Payments from a life annuity end at your death. If the annuity has a guaranteed period, payments may continue to your beneficiary until the annuity’s expiration or be taken in a lump sum equal to the value of the remaining benefit.
Joint Life and Last Survivor Annuity: Payments will continue until the later of your death or the death of your spouse. At that time, any guaranteed payments which remain will be paid to the beneficiary.
Annuity Certain: On your death, an annuity certain continues payments until the end of the guarantee period. If you have a lump sum and need to guarantee yourself a steady stream income, consider a payout annuity.
