Annuities by arun

The answer, not exactly, but a probing question to determine the right answer, was … ‘What do you want your money to do while you are alive, and what do you want it to do, after you die ? Asked the financial advisor.

Here is what I want, said the money man, the investor. I want a guaranteed pay check every month for the rest of my life. And when I die, I want my wife to get the same check, every month for the rest of her life. When she dies, we want our son to get that same check for the rest of his life. And when he dies, his wife, our daughter-in-law, should get the same check for her life.

And finally, when his wife dies, we want our grand-daughter to get the same check for the rest of her life. That is what I want.

All this can be achieved through a well crafted Annuity. Insurance companies are the only institutions that can use Mortality Credits and design a scheme, Retirement Income Annuity, that can last for generations, with guaranteed and predictable income.

Annuities are reverse of Life Insurance. In life insurance you pay smaller amounts in premiums, and expect a big pay out, a lump sum of money, when you die or retire. In annuities you pay a big lump sum of money, up front, say the accumulated value of a retirement plan or the life time of savings, and receive a regular, monthly income for ever, on guaranteed basis.