They may also receive the balance of the regular payments as a lump-sum. If you die before the end of the term, your beneficiary or estate will continue to receive regular payments. Term-certain annuityĪ term-certain annuity provides guaranteed income payments for a fixed period of time (term). You can combine these options, but each additional feature will lower the amount of your income payment. a cash-back option: provides a one-time payment to a beneficiary or your estate if you die before receiving a specific amount of money (usually the amount you paid for your annuity).a guarantee option: income payments continue to be paid to a beneficiary or your estate if you die within a specific amount of time.a joint and survivor option: income payments continue as long as one of the annuitants is alive.However, some annuity providers offer the following options so that payments continue after you die: No money goes to your estate or named beneficiary. In most cases, your life annuity payments stop when you die. If you live past 82, you will still receive $500 a month as long as you live.Īs this table shows, the longer you live, the more income your annuity provides. For example, if you buy a life annuity for $100,000 at age 65 with an income of $500 per month, you get your $100,000 back by age 82. whether you want regular income payments or income payments that will increase or decrease regularlyĪ life annuity provides you with a guaranteed lifetime income.whether or not you want the annuity to continue to be paid to a beneficiary after you die.It’s important to understand each type of annuity and what options, benefits and risks each type presents.īefore you buy an annuity, you need to decide: the rates of interest when you buy your annuity.

the length of time you want to receive payments.whether you have the option to continue payments to a beneficiary or your estate after you die.the amount of money you invest in the annuity.your age and health when you buy the annuity.The amount of the regular income payment you get depends on a number of things, such as: You can choose to start receiving your payments right away, or at a later date if you bought a deferred annuity. You can choose to either receive income payments for a fixed period or for as long as you live.ĭepending on the type of annuity you choose, you can receive income payments at different frequencies: a transfer of capital from annuity holders who die earlier than statistically expected to those who live longer than expected.The income payments you receive from an annuity are a combination of 3 things: You can buy an annuity with a lump sum or through multiple payments over time. Typically, it is used during your retirement years and sold by an annuity provider, such as a life insurance company. An annuity is a financial product that provides you with a guaranteed regular income.

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