The word annuity is derived from the Latin wordmeaning year or annual.
It is a series of recurrent payments.
Annuity insurance continues to be a much studied financial instrument in actuarial sciences.
In the insurance industry annuities are generic products where the insurance company promises the annuitant or the beneficiary a certain sum of money at defined intervals and also for a maximum stipulated time.
Often, annuities are meant for the entire life time of the insured.
Annuity insurance can be of two kinds - Fixed or Variable.
In the fixed annuitythe rate of return is fixed and will primarily be lower than market linked securities because the fixed return can only be assured by way of investing in government securities of debt bonds or similar financial instruments.
A variable annuity promises returns at a variable rate of return.
The annuity product is based on the principle of systematic savings or deferred payments.
In this phase of the Annuity insurance, the insured or the annuitant is depositing certain sums of money which will be received for later use by them.
This means that people invest and get returns a little later.
The phase of collecting the corpus of depositing money is called the accumulation phase of the annuity and the one in which the benefits are received is called the distribution phase.
In case of immediate annuities, a large corpus is used to purchase annuity and the payouts can commence almost immediately.
Annuity insurance is based on the life expectancy rates and the possibilities of the annuitant surviving the down payment cost of an immediate purchase annuity.
It is worthwhile to understand and value the terms of your annuity policy before investing in these instruments.
A frequently used term in annuity insurance is the time to "annuitize".
This means that the time to build an annuity is over and the time to draw repeated payments at fixed intervals has commenced.
"Annuitizing" marks the end of the accumulation phase and the commencement of the distribution phase of the annuity.
Various banks sell annuities as agents of various insurance companies.
These are complicated and need based products and while financial counsel from a bank functionary is essential, it may not always be enough to answer all your questions.
It is recommended that the annuity purchase be a well thought out and planned decision because it can become the sole source of income in later years and a wise decision made now could augur well for the future.
The demands of future generations and those who will enjoy the benefits of the annuity insurance a decade later usually influence the research and development of these products.
Conclusion: Annuity insurance is a responsible decision for planning future incomes.
It is best to know the product and understand your unique needs before choosing to invest in this financial instrument.
Make sure you read up thoroughly on the subject before you purchase any annuities.
It is a series of recurrent payments.
Annuity insurance continues to be a much studied financial instrument in actuarial sciences.
In the insurance industry annuities are generic products where the insurance company promises the annuitant or the beneficiary a certain sum of money at defined intervals and also for a maximum stipulated time.
Often, annuities are meant for the entire life time of the insured.
Annuity insurance can be of two kinds - Fixed or Variable.
In the fixed annuitythe rate of return is fixed and will primarily be lower than market linked securities because the fixed return can only be assured by way of investing in government securities of debt bonds or similar financial instruments.
A variable annuity promises returns at a variable rate of return.
The annuity product is based on the principle of systematic savings or deferred payments.
In this phase of the Annuity insurance, the insured or the annuitant is depositing certain sums of money which will be received for later use by them.
This means that people invest and get returns a little later.
The phase of collecting the corpus of depositing money is called the accumulation phase of the annuity and the one in which the benefits are received is called the distribution phase.
In case of immediate annuities, a large corpus is used to purchase annuity and the payouts can commence almost immediately.
Annuity insurance is based on the life expectancy rates and the possibilities of the annuitant surviving the down payment cost of an immediate purchase annuity.
It is worthwhile to understand and value the terms of your annuity policy before investing in these instruments.
A frequently used term in annuity insurance is the time to "annuitize".
This means that the time to build an annuity is over and the time to draw repeated payments at fixed intervals has commenced.
"Annuitizing" marks the end of the accumulation phase and the commencement of the distribution phase of the annuity.
Various banks sell annuities as agents of various insurance companies.
These are complicated and need based products and while financial counsel from a bank functionary is essential, it may not always be enough to answer all your questions.
It is recommended that the annuity purchase be a well thought out and planned decision because it can become the sole source of income in later years and a wise decision made now could augur well for the future.
The demands of future generations and those who will enjoy the benefits of the annuity insurance a decade later usually influence the research and development of these products.
Conclusion: Annuity insurance is a responsible decision for planning future incomes.
It is best to know the product and understand your unique needs before choosing to invest in this financial instrument.
Make sure you read up thoroughly on the subject before you purchase any annuities.