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Life Annuity- A Great Plan for Retirement

Posted On : Jan-17-2012 | seen (517) times | Article Word Count : 427 |

Life annuity is a great investment plan to secure your retirement days. The lifetime annuity plan may be of two types- fixed and variable ones. Two major phases are evident in such plans namely accumulation phase and distribution phase.
The lifetime annuity is, in actual, an agreement with providers of insurance, in which the issuer or seller that is the life insurance corporation put together a sequence of payments to purchaser in future, in lieu of the instant lump sum imbursement or the succession of habitual payments. The duration of this gush of payments is not known. Generally it is decided on the basis of the demise of the annuity buyers.

The agreement is terminated on the decease of the annuity buyer, in case there is no recipient subsequent to the annuity buyer, whose name is stated in the bond. Thus such lifetime annuity may be said to be as the longevity insurance.

Phases of such Annuity

Mainly two essential phases are there for such life annuity. One is the phase of accumulation whereas the other phase is the period of distribution. The phase of accumulation is basically the time period of the purchaser dumping the cash into the annuity account. The next phase coming after once the accumulation phase is completed is distribution period. In this phase the company providing the insurance makes out the earnings repayments till the demise of the annuity buyer or buyers whose names are specified in the annuity agreement.

The periods of such life annuity may be united together as the plan of retirement payment and retirement savings. The payments are said so as the individuals buying such plans have to contribute a certain amount of money in a regular way to this annuity till a definite time period and after that they start getting payments regularly from the account until their bereavement.

Kinds of Annuity
Lifetime annuity is mainly of two kinds-


Fixed annuity- Fixed annuities are those whose repayments are actually given out in an amount of money that is fixed by the agreement and never changes throughout the scheme.

Variable annuity- Variable annuities are those annuities, then again, whose amount to be paid varies in accordance with the performance of the investment. There are lots of aims which may be stated as the cause of obtaining the plan of variable annuity. One identifiable truth attached with it is for the intention of getting the facility of tax deferral. Money dumped on the plan of variable annuity develops on the foundation of tax deferment. As a result the duties are not outstanding until the withdrawal of the plan is made. Variable annuity plans too offer a diversity of finances from a variety of investment managements or the money managers.

Article Source : http://www.articleseen.com/Article_Life Annuity- A Great Plan for Retirement_135096.aspx

Author Resource :
Robert Cook is a Financial consultant who has good information on life annuity and Lifetime annuity For more information he recommends you to visit www.immediateannuities.com/

Keywords : lifetime annuity, life annuity,

Category : Finance : Finance

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