If you are considering investing in an annuity, you should first actively research about it so can completely understand all the conditions and details each on offers.
Typically, there are a variety of annuities; although, the standard type of annuity is a fixed annuity. In this kind of annuity, you are required to make a beginning investment in an insurance company. Then that same company pays you monthly. Although, there are a few alternatives to this set up, but this is considered the standard.
The calculations for the payment that you receive are done by the insurance company based on your life expectancy. It will be computed based on your age and gender. Your investment is divided by your life expectancy and this becomes you guaranteed monthly payment.
Conveniently, with a fixed annuity you are guaranteed with a monthly income which is more than you can get from any other products. However, when time comes and you pass away, the unrecoverable principal will actually be surrendered to the insurance company. Essentially, if you die early, the insurance company benefits.
This type of annuity also has different types of contracts. There is the single life contract wherein the investor doesn't have any plans of leaving any remainder benefits to the heirs. On the other hand, a contract that is joint is also available. For this one, the life expectancy is based on both the investor and the spouse. The monthly payments continue as long as both are alive.
Guaranteed period contracts are also available. This contract offers a lifetime payment or a specified period. This is useful for people who opt to guarantee payments for their heirs. In addition, it allows you to fully recover your entire investment.
Another contract that guarantees payments to surviving family is the remainder guarantee contract. Just like the previous contract, this also ensures total investment recovery.
Remember, before choosing a contract, make sure you understand all the conditions. This will save you a great deal of headache. - 31884
Typically, there are a variety of annuities; although, the standard type of annuity is a fixed annuity. In this kind of annuity, you are required to make a beginning investment in an insurance company. Then that same company pays you monthly. Although, there are a few alternatives to this set up, but this is considered the standard.
The calculations for the payment that you receive are done by the insurance company based on your life expectancy. It will be computed based on your age and gender. Your investment is divided by your life expectancy and this becomes you guaranteed monthly payment.
Conveniently, with a fixed annuity you are guaranteed with a monthly income which is more than you can get from any other products. However, when time comes and you pass away, the unrecoverable principal will actually be surrendered to the insurance company. Essentially, if you die early, the insurance company benefits.
This type of annuity also has different types of contracts. There is the single life contract wherein the investor doesn't have any plans of leaving any remainder benefits to the heirs. On the other hand, a contract that is joint is also available. For this one, the life expectancy is based on both the investor and the spouse. The monthly payments continue as long as both are alive.
Guaranteed period contracts are also available. This contract offers a lifetime payment or a specified period. This is useful for people who opt to guarantee payments for their heirs. In addition, it allows you to fully recover your entire investment.
Another contract that guarantees payments to surviving family is the remainder guarantee contract. Just like the previous contract, this also ensures total investment recovery.
Remember, before choosing a contract, make sure you understand all the conditions. This will save you a great deal of headache. - 31884
About the Author:
Jim offers further information on single premium annuity and how a structured settlement company works on his site.
