Saturday, May 9, 2009
IMMEDIATE ANNUITY
Annuity is a written agreement between a person and a life insurance company where the insurance firm agrees to make a series of payment to the policyholder in return for the premiums paid by the person who is holding the policy. Annuity is very helpful as it saves the money for future needs. At the same time, it is not a short time investment. Therefore, it is better to use that fund which is kept aside for long-term investment.
Immediate annuities are mostly suitable for generating income for future. It is really a good option to invest for retirement planning. An annuity agreement consists of three people: one is called the owner, the second participant is known as the annuitant and the third one is the beneficiary. The owner is the one who purchased the policy and is responsible for paying the premiums. He is also responsible to pay the taxes due to surrender or payout. The owner selects the beneficiary and also has the power to the change the agreement in the future. Annuitant is the person who is going to receive the annuity payments. His life expectancy and age is considered to calculate the benefits of annuity. The beneficiary is the one who is entitled to receive the death benefits if the annuitant or the owner of the policyholder dies.
Annuities can be single premium or multiple premium contracts. Among IRAs, multiple premium agreements are very popular. A person is required to make a series of payment. Multiple premium payments can be of two types: one is fixed and another one is variable. In flexible multiple premium cases a person can pay as much as he can and at any point f time. Where as in the fixed multiple premium cases, the amount and the timetable are fixed.
The basic purpose of immediate annuity is offering safety and security. It is a good investment tool for those who have retired and also for those who will be retiring.
Immediate annuities are mostly suitable for generating income for future. It is really a good option to invest for retirement planning. An annuity agreement consists of three people: one is called the owner, the second participant is known as the annuitant and the third one is the beneficiary. The owner is the one who purchased the policy and is responsible for paying the premiums. He is also responsible to pay the taxes due to surrender or payout. The owner selects the beneficiary and also has the power to the change the agreement in the future. Annuitant is the person who is going to receive the annuity payments. His life expectancy and age is considered to calculate the benefits of annuity. The beneficiary is the one who is entitled to receive the death benefits if the annuitant or the owner of the policyholder dies.
Annuities can be single premium or multiple premium contracts. Among IRAs, multiple premium agreements are very popular. A person is required to make a series of payment. Multiple premium payments can be of two types: one is fixed and another one is variable. In flexible multiple premium cases a person can pay as much as he can and at any point f time. Where as in the fixed multiple premium cases, the amount and the timetable are fixed.
The basic purpose of immediate annuity is offering safety and security. It is a good investment tool for those who have retired and also for those who will be retiring.
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