There are many options for individuals planning retirement. One of the financial instruments that helps you plan your retirement effectively and avoid any financial setbacks during the golden years is an annuity. An annuity plan is a type of insurance that provides a steady flow of income.
Let us go deeper to help you get familiar with annuity insurance meaning.
Annuity plans are retirement plans that pay you an income during your retirement years. To buy the plan, an individual must make a lump sum payment or pay in installments over the years.
Annuities can be customised to meet the specific needs and goals of individuals. There are two broad categories of annuities - immediate and deferred. Deferred annuities are classified into three types - fixed, variable, and indexed.
Apart from choosing the annuity form, you can pick how you want to receive your payouts. It can either be immediate, where you receive the payment within a short time or deferred, where disbursements are made after a definite number of years in the future.
After understanding the annuity meaning, you must learn how it works. Here are the steps of its functioning:
An annuity is one of the ways you can arrange an income for your retirement years. Some of the factors you must keep in mind before picking an annuity plan are:
If you have another source of income post-retirement, you can opt for a lower amount in annuity. This option will reduce the premium amount. However, if you do not have an income source after retirement, you must invest a bigger amount in an annuity to replace your main source of income.
Young individuals with ample time before retirement should choose a deferred annuity. On the contrary, if you are ready to begin your life’s second innings, an immediate annuity plan will provide the desired returns.
An annuity is a type of long-term insurance product. Thus, make sure that the insurance company you pick carries good credibility. For this, check the company’s financial position.
Once you have understood what is an annuity in financial management, you can decide whether or not it is right for you. Under an annuity plan, the policyholder receives payouts after paying a specific number of premiums.
These payouts are beneficial for people who have retired or do not have a regular income. Thus, most people considering annuity policies will either be approaching retirement or already retired. People who are doing financial planning for their retirement years also usually consider annuity plans.
An annuity plan helps you tackle your financial obligations and ensure your family’s financial security after retirement. A tailor-made, well-planned, and robust annuity plan can give you a steady flow of income or a lump sum payment to face life after retirement with solid financial support. The right time to buy an annuity plan is at a young age because you get value leverage.
PNB MetLife Immediate Annuity Plan ensures a guaranteed income for your lifetime after you pay a premium only once.
Annuity plans help you maintain a stable income, prepare for uncertainties, avail of death benefits, achieve financial goals, enjoy guaranteed returns, and save taxes.
Yes. The age limit for annuities varies from one plan to another.
Disclaimer:
The aforesaid article presents the view of an independent writer who is an expert on financial and insurance matters. PNB MetLife India Insurance Co. Ltd. doesn’t influence or support views of the writer of the article in any way. The article is informative in nature and PNB MetLife and/ or the writer of the article shall not be responsible for any direct/ indirect loss or liability or medical complications incurred by the reader for taking any decisions based on the contents and information given in article. Please consult your financial advisor/ insurance advisor/ health advisor before making any decision.
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