Benefits Of Fixed Annuities And Lifetime Annuity

By Author: Mike Anderson
Total Articles: 32
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Fixed Annuities are beneficial to many investors because they provide a guaranteed income to those who are retired or close to retirement. Fixed Annuities refer to as a single premium investment which guarantees the investor a minimum interest rate for the term of annuity. There are generally two types of Fixed Annuities, they are: life annuities and term certain annuities. Life annuities pay a fixed amount of money at regular intervals until the death of the annuitant. It guarantees the investor a secured source of income and makes them tension free. Term certain annuities pay a certain amount of money until the term ends.

Fixed Annuities can be immediate or deferred. Immediate payouts start within one year of the contract being initiated. On the other hand deferred payouts are delayed till a specified time period. Fixed Annuities are considered to be a low risk investment because they have a fixed and stable interest rate. There is no need to keep a close watch on the investment of Fixed Annuities after the contract is initiated and the premium is paid. They help the investors to receive a guaranteed ...
... income at a very low risk thereby reducing the stress regarding financial crisis.

Thus, in order to handle situations efficiently after retirement it is important to do money management and precise financial planning. You can do so by investing in Lifetime Annuity. In Lifetime Annuity you are required to make regular payments for a certain period of time and get a monthly income for the rest of your life.

In Lifetime Annuity like any other annuity has two phases: first is the accumulation phase and the other is the payout phase. During the first phase the annuity grows as the banking institution or the insurance company provides a rate of interest on the savings accumulated because idle saving does not provide any benefits to the individual. The Lifetime Annuity investment grows depending on the rate if interest offered by the annuity provider. After the investment of re-determined value of money has been done the insurance company has to distribute income. This phase is called the payout phase. Thus, in Lifetime Annuity the distribution of income is done in accordance with the agreement between the investor and the insurance company.

Thus, Fixed Annuities and Lifetime Annuity both provide great benefits to several investors but the return one receives largely depends on the amount of money invested.