Life Annuities

Sometimes called an “income strategy,” life annuities convert an initial premium into a series of periodic payments that begin within one year from the time of your lump sum payment.

Life annuities:

Straight life annuity:
 
This option provides payments for the rest of your life, even if the payments exceed the money you put into the annuity. While this option usually pays out the most, if you die before all of the money you put in has been distributed, no additional payments will be made to your dependents.

Joint and survivor life annuity:

This life annuity provides payments to you as long as you live and to a designated beneficiary as long as he or she lives. Life income with refund annuity. With this product, payouts continue for life, but if you die before collecting all the premiums you have paid, your beneficiary collects the remaining money.

Life annuity with period certain:

This annuity offers income for life. If you die before receiving the total of premiums paid, your beneficiary receives payments for the remainder of the period.

No single life annuity is best for everyone. There are many different kinds of life annuities, and some products make more sense in individual situations than others.Terms and conditions will vary, so it’s important to do your homework and compare the different kinds of life annuities available to you, and the term of each life annuity contract.Carefully read the life annuity contract.

Be sure your agent has answered your questions thoroughly before you buy, and don’t skip over the fine print.The long-term nature of lifetime annuities means you’ll want to carefully consider whether or not you’re likely to have the lifetime annuity long enough to offset any charges you may incur if you need the funds sooner.

Lifetime annuities are retirement benefits paid as a life annuity (a series of payments, usually monthly, for life) to the participant and a survivor annuity over the life of the participant’s surviving spouse (or a former spouse, child or dependent who must be treated as a surviving spouse) following the participant’s death.

The life annuity amount paid to the surviving spouse must be no less than 50% and no greater than 100% of the amount of the annuity paid during the participant’s life.

The amount paid to the surviving spouse under a lifetime annuity is equal to the certain percentage (as chosen) of the amount of the life annuity payable during the participant’s life.