The effects of recession have not completely receded, the economy is still recovering from it and in this struggle pensioners strive to stay afloat. People are now, more than ever, concerned about their finances and annuities which are being appreciated more and more. Annuities are like a safety feature for a person looking to retire and help to plan the future. In other words they are a form of longevity insurance and provide a continuous supply of income regardless of how long your life is.
There are various kinds of annuities and people choose them as per their lifestyle and the one that suits their current scenario. When people retire they intend to maintain the similar luxurious life without having to work very hard for it and that is where annuities come in. The selection of the annuity should be made sensibly as it would mean investing a big amount for that annuity too.
People new to the annuity concept often enquire about the reasons why they should not be overlooked. Well, there are plenty of reasons as their benefits often facilitate family members too. Many annuities are lifetime contracts and that means you would receive the annuity income on the decided time as long as you live. It is obligatory for annuity income providers to follow the rules set in the contract mutually; thus, you won’t have to worry about missing out or outliving your annuity income.
The best part of the annuities is that you can list down the beneficiaries of each type. One of the popular annuity types is a fixed term annuity. Fixed annuities come with the feature of protecting the income receiver from the inflation. The income will keep up the cost of living but this annuity usually comes with high initial investment tag or your starting income will be low.
The principal protection policy of the annuities makes them the suitable choice for pensioners. Principal protection means that it is certain that you or your heir will get back at least the money that you invested in the annuity. The Financial Service Authority (FSA) keeps an eye on the legal framework of annuities, update them and also think from a pensioner’s point of view so they do not end up losing their lifetime savings.
With so many benefits, overlooking annuities would be a big mistake. It would be better to speak to a professional to know which annuity type suits you, so that you can shape your future the way you want.