A simple annuity definition is that it is an amount of cash that you receive for money invested. The amount that you invest resides with an insurance company. The insurance company is in charge of your money and responsible to see that you get paid the agreed upon amounts.
The derivation of annuity comes from Medieval Latin annuitas, from Latin annuus, (yearly) from annus (year).
Annuity means a specified amount of money that ispaid during specific intervals. The amount depends on the type of annuity and amount of funds you make available. Annuities are often a major part of retirement income streams, providing dependable income.
You can receive a set monthly amount for the rest of your life if that is how you wish your annuity to be set up.
An annuity can be paid at the beginning of the term:Annuity Due.
Or it can be paid at the end of each term: Ordinary Annuity.
Variety of Options
- Pay out as long as one’s spouse is alive…
- Pay out for a fixed amount of years regardless if the investor passes away during the term…
- Fix in high interest rates to give you an advantage when rates are low…
- Guarantee a payment to your heirs…
- Some will not pass to your heirs, but provide you with better payment options while alive…
The above are some typical examples.
Guest post by Tony Durso:
Tony Durso founded www.Annuities-Financial-Planning.com to help people get the financial information they need in our current economic times. You can find out about annuities and how they work. You can get the information you need to update or modify your financial planning. Read up on 401k’s and IRA’s. There are even a multitude of calculators available to help you calculate savings, determine monthly annuity income that you will receive, etc. This site allows prospective investors to educate themselves on annuities and other financial planning options. Investors can receive a free annuity quote or speak to a Certified Financial Planner.
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