An annuity is an Investment option through which you can generate income for the future. There are different types of policies and you should take the one in which you feel it can profit you. It is one of the safest methods of generating income in old age. You won’t be dependent on someone else. You invest an amount today and exercise the benefits of that particular policy in its vesting phase. It is a phase that you can understand as your retirement phase. During this time, they will return the money to you monthly with some extra returns. You might wonder that how do they give a return on that? The answer is simple. They keep your money in the market. A part of the amount that is profited over time is given back to you. In the end, it all depends upon the plan you choose out for your future.
At any point in time you feel that the return that turnout was not what you were expecting, you can sell the annuity. It might happen that, during the times when you invested the amount, your financial status was not that strong. So you invested less money. Now when you are getting its return, your living standards have increased. This might make you feel that you can invest that same amount of money somewhere else and get higher returns. Certain companies help you correctly sell your annuity. One such trusted company is a structured settlement marketplace. Here you can buy an annuity, sell your annuity and also inherit someone else’s annuity.
HOW DIFFERENT TYPES OF ANNUITY WORK?
1) Life Annuity- you can receive the amount monthly, quarterly, or yearly as per your convenience till you are alive.
2) Joint Life Annuity- you can receive the amount monthly, quarterly, or yearly as per your convenience till you are alive. After your demise, your spouse will continue to get it.
3) Life annuity with return of purchase price- you will receive the amount regularly till you are alive. After your demise, your children will get the initial lump sum amount you invested.
4) Joint Life Annuity with the return of purchase price-you can receive the amount monthly, quarterly, or yearly as per your convenience till you are alive. After your demise, your spouse will continue to get it. After both of your demise, your children will get the initial lump sum amount invested.
5) Immediate annuity with regular payouts- your income will start coming immediately after you start investing. It will be based on the interval of your convenience.
6) Deferred annuity- you will receive regular income from the future date selected by you.
7) Inflation-indexed annuity: Each year there is a growth in the payable annuity at a specific rate. Suppose 6% or 7%. It might not be connected to the inflation rate. The rationale will take care of the increase in expenses at some level.
