An annuity is a series of payments that are guaranteed for a specific amount of time. Someone who receives a pension gets an annuity, and you can also buy an annuity from an insurance company. There are a lot of different types of annuities available, but a single life annuity is the most common among them. What exactly is a single life annuity, and how does it work? That’s what we’re discussing today.
Defining Single Life Annuities
A single life annuity is a contract between a financial institution and one specific person. A series of payments are guaranteed during that individual’s lifetime, but the payments cease when the annuity holder (aka an “annuitant”) passes away. Some annuities will pay a lump sum to an annuitant’s relatives in the wake of their passing, others award benefits over a period of several years. To be clear, single life annuities don’t come with survivor benefits.
Which Annuity Has the Highest Monthly Payout?
Single life annuities tend to offer higher payments because they lack survivor benefits. Workers typically have the option to choose between a single life annuity or several other types when it’s time to decide their pension plan arrangements. The guaranteed payment is often much higher for single life annuity holders. It can be a great option, especially if an annuitant has life insurance or other arrangements for their beneficiaries.
Numerous Financial Institutions Offer Annuities
Pensions aren’t the only way to receive an annuity. Banks, financial planners, and insurance agents all sell a wide range of payment plans – such as a New York Life income annuity or a Western National Life annuity. Choosing the right issuer is essential; prospective annuity buyers should carefully review an issuer’s ratings and ask plenty of questions when discussing payment plans.
The cost of an annuity depends on a buyer’s age, health, and the size of each monthly payment. A single life annuity calculator can help buyers figure out how the specifics of their monthly benefit requirements and how much they can invest in their plan each month. Bankrate.com features a robust life annuity calculator. Most providers also offer annuity calculators on their websites, as well as an annuity service center.
Who Could Benefit Most From a Single Life Annuity?
Anyone who seeks a specific amount of guaranteed income when they retire should consider opting for a single life annuity. They’ll need to compare providers and ensure that they understand the requirements of each financial institution. For instance, New York Life annuity forms may be different than requirements for Equitrust annuities. This process may be time-consuming and even challenging, but the results are well worth the effort. Having peace of mind during retirement is priceless.