Annuities are generally purchased for retirement income and/or tax-deferred growth. With regards to growth, some annuities offer fixed rates of growth, and some offer other methods such an indexed annuities, which are tied to the performance of various stock market indices. Annuities can be funded with one lump sum or using periodic payments. Ensure Charity works with over 40 of nations largest carriers which will allow us to find the best annuity for your situation.
When it comes time to withdraw from the annuity, there are several annuity income options listed below:
- Cash Refund Option – This option pays the annuitant a payment for as long as he or she lives. If the annuitant passes away before receiving the equivalent of the premium paid into the contract, then an elected beneficiary is paid the difference in a lump sum.
- Straight Life Income Option – This is also known as a life only annuity where the annuitant receives benefits for his or her lifetime. When the annuitant passes away, no further payments are made to the annuitant and there are no assigned beneficiaries. Due to the risk associated with this option, the annuitant receives a higher income amount. This is a viable option for individuals with no dependents or beneficiaries.
- Installment Refund Option - This option pays the annuitant a payment for as long as he or she lives. If the annuitant passes away before receiving the equivalent of the premium paid into the contract, then an elected beneficiary is paid the difference in annuity payments until the principal amount is gone.
- Life with Period Certain Option – This option is less risky than the straight life annuity option: it guarantees a minimum period of payments. If an annuitant has a life with a 15-year period option, then payments would continue for 15 years whether the annuitant is alive or not. If the annuitant lives past 15 years, then the payments will continue; however, if the annuitant passes away after the 15 years, then the beneficiary receives nothing.
- Joint and Survivor Option – This annuity is designed to pay income for two lives and designed for married couples. If either annuitant passes away, then the survivor will continue to receive payments. When the surviving annuitant passes away, there are no more payments made.
- Joint Life – This is a plan that is not intended for a married couple. The payments are made to two or more annuitants, and payments stop at the passing of one of the annuitants.
- Period Certain – This annuity is designed to provide income for a specified amount of time. The benefit is paid for the period regardless if the annuitant is alive or not. The payments stop when the period certain has expired. This is an option for retirement income, and does not require much risk.