An annuity is an investment that pays you a set monthly income and is one of the simplest retirement income options. It is designed for people who want to turn some of their savings into a guaranteed source of income that will last a lifetime. An annuity is a lump sum investment where the insurer pays guaranteed regular income to the investor. This payment consists of interest and a return of principal. The income payments are based on:
Your age (in case of Joint Annuity, our partner's age), for life annuities
Current interest rates
The period of time for which the payments are guaranteed
The amount of money invested into the annuity
There are three types of annuities:
Life Annuities – this type of an annuity will provide income payments for as long as you live.
Joint Annuities – this annuity provides regular income payments as long as both of the annuitants are living. When one person dies, the partner continues to receive income payments.
Term Certain Annuity - Term Certain annuities provide a guaranteed and regular income for a pre-determined period of time; after this period, the annuity contract ends.
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