Life insurance annuity

It is a well known fact that all people should be insured at a certain point in their life. However the same insurance does not apply for all stages of your life. If you have a mortgage you need a special type of insurance. If you have children you should cover yourself at least until your children are all grown up. Life insurance annuity is a concept that is usually associated with life insurance for seniors. A life annuity represents an agreement documented by a legal contract through which the insurance company makes a series of regular payments to the annuitant. In order to benefit from annuity a person must either pay a lump sum or he must make a series of payments until he retires (a sort of premiums).

The reason life annuity is mostly associated with senior citizens is due to the fact that it is a great way of supplementing a retirement plan. Although most people are very responsible with their retirement plans, the current economic situation is raising a lot of questions about the safety of the future economy. Therefore a lot of citizens worry that their retirement plans will not be enough for maintaining a decent standard of living. A life insurance annuity is similar to a whole life insurance. The main difference between the two concepts is that with an annuity the insurer can use his benefits while he is still alive whilst with whole life insurance the proceeds go directly to the beneficiaries. Another great advantage is that annuities allow you to have a greater control over how you choose to pay your life insurance quotes that are associated with the annuity. Furthermore just like whole life insurance, an annuity provides protection until you die. This means that even if you outlive your retirement funds you will still have a steady income to count on.

After analyzing the mechanism of the life insurance annuity one can conclude that it is the perfect balance between life insurances and investments plans. Depending on the needs and resources of each individual there are several types of annuities that one can choose from. A fixed annuity means that the payments that will be received from the insurance company will be fixed during your term period or during the rest of your life. On the other hand in the case of a variable annuity the payments made to the annuitant can differ from payment to payment and are depending on the level of performance of the insurance company. With an immediate annuity a person can start to receive payments the moment that the annuity sum is paid. However few people choose this option due to the fact that it is not very efficient. Last but not least the deferred annuity is probably the most popular one. With this options the payments start at a determined time (usually when the policy owner retires)