Taking out an annuity is a big decision in anyone's life, and this decision can be made harder when it comes to the realisation that this is the very last investment that you will make. Annuities are designed to be an income that you receive for the rest of your lives and for this reason it's important that you make the right one.
Many people are concerned that they may take out an annuity and then die quite shortly afterwards, therefore losing much of the money that they had saved. To help appease the concerns of the annuity maker, most annuity companies offer what is known as an annuity guaranteed period, this helps to ensure that even if the maker was to die within the first few years of the annuity, the money would still be paid out to the next of kin.
If you are alive throughout your guarantee period then obviously your annuity works as normal, however if you were to die during this time then your remaining annuity pay outs are given to your next of kin. Although it won't be the substantial amount that you have saved, your next of kin will at least receive the rest of the guarantee period annuity if you were to die unexpectedly during that time.
Determined on an individual basis, the length of the annuity guarantee period can vary from anywhere between five and ten years. In most cases it is more expensive to take out the ten year guarantee, but many people prefer this as it gives them a more substantial annuity pay out and therefore a better income to their living relatives.
At about 1.7% the fees for an annuity guarantee period are not massive, but they are enough to put a small dint into your annuity income. In addition the annuitant may find themselves still paying this fee after the period has expired.
Many people are concerned that they may take out an annuity and then die quite shortly afterwards, therefore losing much of the money that they had saved. To help appease the concerns of the annuity maker, most annuity companies offer what is known as an annuity guaranteed period, this helps to ensure that even if the maker was to die within the first few years of the annuity, the money would still be paid out to the next of kin.
If you are alive throughout your guarantee period then obviously your annuity works as normal, however if you were to die during this time then your remaining annuity pay outs are given to your next of kin. Although it won't be the substantial amount that you have saved, your next of kin will at least receive the rest of the guarantee period annuity if you were to die unexpectedly during that time.
Determined on an individual basis, the length of the annuity guarantee period can vary from anywhere between five and ten years. In most cases it is more expensive to take out the ten year guarantee, but many people prefer this as it gives them a more substantial annuity pay out and therefore a better income to their living relatives.
At about 1.7% the fees for an annuity guarantee period are not massive, but they are enough to put a small dint into your annuity income. In addition the annuitant may find themselves still paying this fee after the period has expired.
No comments:
Post a Comment