Annuity
Introduction and Types of Annuity Products
Introduction
An annuity is a retirement planning tool which turns individuals’ savings into a steady income stream over a period of time.
Types of annuity products
In terms of when the annuity income starts:
Immediate annuity
Immediate annuities do not come with an accumulation period. The annuitant starts receiving annuity income once the premium is paid up in a lump sum.Deferred annuity
A deferred annuity has an accumulation period. The annuitant pays premium in instalments, the premium payments are accumulated over time which builds an income stream. Annuity payouts are made to the annuitant after a certain period of time or at a specified age.
In terms of how long the annuity income lasts:
Life Annuity
A life annuity provides lifelong annuity income. Note that the definition of the term ‘lifelong’ might vary among companies. While some define ‘lifelong income’ as paying you up to your 100th birthday, others may pay the annuity as long as you live.Term Annuity
This refers to an annuity contract which provides income over a specified period of time, e.g. 10 / 20 years.
Introduction and Types of Annuity Products
Introduction
An annuity is a retirement planning tool which turns individuals’ savings into a steady income stream over a period of time.
Types of annuity products
In terms of when the annuity income starts:
Immediate annuity
Immediate annuities do not come with an accumulation period. The annuitant starts receiving annuity income once the premium is paid up in a lump sum.Deferred annuity
A deferred annuity has an accumulation period. The annuitant pays premium in instalments, the premium payments are accumulated over time which builds an income stream. Annuity payouts are made to the annuitant after a certain period of time or at a specified age.
In terms of how long the annuity income lasts:
Life Annuity
A life annuity provides lifelong annuity income. Note that the definition of the term ‘lifelong’ might vary among companies. While some define ‘lifelong income’ as paying you up to your 100th birthday, others may pay the annuity as long as you live.Term Annuity
This refers to an annuity contract which provides income over a specified period of time, e.g. 10 / 20 years.
Introduction and Types of Annuity Products
Introduction
An annuity is a retirement planning tool which turns individuals’ savings into a steady income stream over a period of time.
Types of annuity products
In terms of when the annuity income starts:
Immediate annuity
Immediate annuities do not come with an accumulation period. The annuitant starts receiving annuity income once the premium is paid up in a lump sum.Deferred annuity
A deferred annuity has an accumulation period. The annuitant pays premium in instalments, the premium payments are accumulated over time which builds an income stream. Annuity payouts are made to the annuitant after a certain period of time or at a specified age.
In terms of how long the annuity income lasts:
Life Annuity
A life annuity provides lifelong annuity income. Note that the definition of the term ‘lifelong’ might vary among companies. While some define ‘lifelong income’ as paying you up to your 100th birthday, others may pay the annuity as long as you live.Term Annuity
This refers to an annuity contract which provides income over a specified period of time, e.g. 10 / 20 years.