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Life Annuity

Main Features

  • Only insurance companies offer life annuities. They allow annuitants to receive fixed annuities for life because the return on their capital is guaranteed and determined at the time of annuity purchase.
  • Because life annuities stop upon the death of annuitants, the birth date and sex of each planholder are important criteria in establishing the amount to be paid.
  • Life annuity payments end upon the death of the annuitant or the expiration of the guaranteed period, whichever comes last.
  • Insurance companies usually offer guaranteed periods of 5, 10, or 15 years, or the payment of the annuity until the annuitant turns 90, which ensures that any heirs will be paid the annuity if the annuitant dies earlier.
  • Life annuities may be paid monthly, quarterly, semi-annually, or annually.

Major Advantages

  • Life annuities provide a fixed income that’s guaranteed.
  • They are an easy and practical way of ensuring a financially worry-free retirement.
  • Certain options are offered at the time of annuity purchase:
    • A joint and survivor annuity allows a surviving spouse to receive annuity payments upon the death of the annuitant.
    • An impaired risk annuity offers higher payments and is suitable for those with serious health problems and a lower life expectancy than those who are the same age and in good health.

Warning: The above text is of general nature and is intended for explanatory purpose only. Each of the products described above has its own specific features. Moreover, only the product contracts contain the complete terms and conditions as well as restrictions and exclusions to which they are subject.