Insurance with the recent times has been an essential part for someone who wants to approach the future with as much caution as possible. Among the many kinds of insurances that are in existence, one of them is annuity insurance.
Annuity Insurance can best be described as a contract between a buyer and an insurance company whereby the insurance company pays the buyer until the day that they die. Unlike life insurance which looks to make sure you don’t die too soon, annuity insurance just makes sure you don’t live too long. The payments are made by the insurance company mostly monthly for the time that the person is alive until the day that they die.
Annuity Insurance makes sure that you are well preserved with finances even after you retire. Since the payments are life-long you don’t have to be worried about not having a paycheck at the end of every month because the annuity insurance company will have you covered.
Usually a buyer pays a lumpsum of money to the annuity insurance company at the period at which the said buyer is supposed to be paid. They are paid from the investments they have made and thus they get a monthly stream of money even upon retirement. If there is the inability to make the payment in one lumpsum, there is the scenario where the buyer is allowed to make periodic payments over a said period of time, until the exact moment when the person is supposed to receive the payments. The twist is, if the buyer dies sooner than they might have expected, the remaining part of their investment can be forwarded to the second person, usually indicated in the contract. But if they live longer than the company may not have anticipated, the person enjoys additional benefits at the cost of the company. It is in light with this that buyers are often advised to make these investments with a financially stable company that can be able to honor its obligations.
It is highly advised that a buyer do a lot of research and rate comparisons before they settle for one annuity insurance company. They have to understand the terms of investment and that they are comfortable with them before any signing and consenting takes place. Its better when you get everything in paper and have your insurance advisor guide you to making the right decision.