Immediate annuity refers to income now. The word annuity is Latin for income. With an immediate annuity, income payments start no later than one year after you pay the premium. You usually pay for an immediate annuity with one payment.
When income payments start, the insurance company will pay a rate in effect at that time to calculate the amount of your income payment. Structured Settlements are also funded with a form of immediate annuities.
Life Only- The Company pays income for your lifetime. It doesn't make any payments to anyone after you die. This payment option usually pays the highest income possible. You might choose it if you have no dependents, if you have taken care of them through other means, or if the dependents have enough income of their own.
Life Annuity with Period Certain-The Company pays income for as long as you live and guaranteed to make payments for a set number of years even if you die. This period certain is usually 10 or 20 years. If you live longer than the period certain, you'll continue to receive payments until you die. If you die during the period certain, your beneficiary gets regular payments for the rest of that period. If you die after the period certain, your beneficiary doesn't receive any payments from your annuity. Because the 'period certain' is an added benefit, each income payment will be smaller than in a life-only option.
Joint and Survivor- The company pays income as long as either you or your beneficiary lives. You may choose to have payments continue for a set length of time. Because the survivor feature is an added benefit, each income payment is smaller than in a life-only option.
The income rate depends on your age and the annuity payment option you choose. You will want to obtain a quote from at least two insurance companies.
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Author: Jeff McLeod
Author Bio:
Jeff McLeod is a fixed index-linked retirement income annuity specialist. To get a copy of the Buyer��s Guide visit HappyRetiree.com/
