Immediate Annuities. Detailed analysis and advice on Immediate annuities

Understand Deferred Income Annuities

Deferred Income AnnuitiesDeferred Income Annuities, also known as Longevity Insurance Guarantees and Lifetime Income Guarantee Contracts, have several acronyms- DIA’s, LIG, or just Longevity Insurance.  They are an exciting evolution of the most traditional form of annuity, the Immediate Annuity.

With a Single Premium Immediate Annuity, or SPIA, you buy lifetime income that starts immediately, and generally do so with the payment of a single premium amount.  These types of annuities are explored in the Immediate Annuity Pages.

By contrast, a Deferred Income Annuity offers all the benefits of longevity protection and lifetime income, but it does it in a more efficient way by deferring the start date of the income stream.

Benefit

A few of the main benefits of Deferred Income Annuities are:

  • Build safety around your entire portfolio by eliminating the risk of outliving your money.
  • Plan effectively with the rest of your assets when the single biggest unknown is solved.
  • Cream off the best of the best that the Insurance Company can offer- Mortality Credits.
  • In a low rate world, your payout on a Deferred Income Annuity can be tremendous.

Who It’s Right For

The primary benefit from a Deferred Income Annuity is a high, guaranteed, lifetime payout.

Therefore, the perfect buyer for these types of payments is a relatively young (40’s to 50’s) aged, healthy individual or couple who have a high expectation of longevity.

It’s also perfect for relative affluent people for whom the premium is a small percentage of their assets.  It allows them to enjoy a higher standard of living and spend down their money confidently.

Quite simply, annuitization of assets- meaning, turning your assets into the maximum possible spendable lifetime income at the lowest risk- is mathematically proven to be only possible by using income annuities.

And a deferred income annuity skims off the absolute best a carrier has to offer.

Who Should Not Consider This Annuity

The major disadvantage of a pure longevity income insurance policy is that when you pass away, any unrecovered principal is surrendered to the insurance company.

Now, there are ways to structure the contract to continue payments in your absence, give us a call for more.

But those who can not afford to support themselves prior to the start of income from a DIA policy, or those who do not believe they will live well into their 90’s, may not find the risk of living too long to be worth the price of giving up a portion of their assets  long in advance.

How To Buy

To get started with deferred income annuities, give us a call.  We will generate current market quotes based on your age and discuss your income needs to see if they are appropriate for you.

Immediate Annuity

Immediate Annuities are perfect for retirement investors who need to switch from accumulation mode to income mode.  And the longer you can wait to do it, the better the income.

Because an immediate annuity is a life insurance product, it is tied directly to the unpleasant reality of mortality.  The insurance companies use actuarial tables to determine the amount of money they can pay you in exchange for the principal you can pay them.  It’s a complicated set of calculations that each company does a little differently, and is indicative of many factors.

The primary determinant of your income from an immediate annuity is your age.  The longer you wait to purchase the annuity, the more the insurance company will pay you on a monthly basis.

Another determinant of the immediate annuity is the insurance company itself- their expectation for future earnings, and their past performance, all determine the amount they are willing to pay monthly.   While it is tempting to seek out the highest yield, you should pay attention to the credit quality of the issuing company.   Sometimes companies that are a little weak may offer higher payouts to attract more premiums, but this could spell trouble in the years ahead if they are not on totally sound footing.

Another aspect to take into consideration with immediate annuities are the options and additional beneficiaries you can identify.  A Spouse can benefit from the annuity after the annuitant passes away, but only if the right options are put in place at the outset.

Annuity Straight Talk can help you find the best combination of safety, flexibility, and profitability when choosing the best immediate annuity for your unique situation.

Understanding Immediate Annuities

An immediate annuity is a contract between yourself and a life insurance company, whereby you exchange a lump sum of money for a stream of income.

An immediate annuity is a great way to turn retirement savings into guaranteed lifetime income.

Immediate annuities provide for immediate income. The terms of the annuity contract govern who owns, who pays, and who benefits from the income.  While this may be the same person, it can actually be three different people.

Immediate Annuities vary in payout with the state of you residence, your age, and with the performance and financial strength of the issuing company.  It pays to shop around before buying an immediate annuity because you may find that the highest payout offered comes from a company with a less than stellar credit rating.

Let AnnuityStraightTalk be your guide to selecting the immediate annuity with the best combination of safety, profitability, and flexibility.