Definition
An annuity is a contract by which the buyer pays a lump sum to the provider; in return the provider will pay a stream of income to the buyer for life. Sometimes the buyer may pay the premiums by installment.
This product is different from life insurance policies, as life insurance provides death benefit; life annuity only provides income for retirement
.
Why do people buy annuity?
People buy this product to provide income after retirement, because the pension or provident fund received by a retiree may not be sufficient, so he can buy this policy as saving for the future. People may also purchase this policy to provide income payment for their loved ones after their demise.
The buyer can purchase this policy by paying the insurance company a lump sum just before retirement, or if he wants to purchase it earlier he can make periodic premiums until the specific retirement age.
There are many types of annuity
Immediate policy - this plan provides income payments begin within 12 months after the buyer bought the policy. This is recommended for those who are about to retire or have retired.
Deferred policy - this plan provides income payments begin more than 12 months after the buyer bought the policy.
How to save money for retirement?
When I finished schooling and came out to work, I thought if I earn 3 thousand dollars a month I can easily save 1 thousand. If one year I can save 12 thousand dollars, and after 30 years I can save a lot of money. But when I saved some money I bought a car, and I worked hard for 5 years to pay it off. After 5 years I changed a better car and worked hard for it. So I find it is difficult to save money, no wonder some old people said they worked until their retirement, they saved a lot of white hair and wrinkles.
So, if you want to have some forced saving for your retirement, you can purchase a life annuity. Remember to save for the rainy days, I mean save money, not white hair and wrinkles
An annuity is a contract by which the buyer pays a lump sum to the provider; in return the provider will pay a stream of income to the buyer for life. Sometimes the buyer may pay the premiums by installment.
This product is different from life insurance policies, as life insurance provides death benefit; life annuity only provides income for retirement
Why do people buy annuity?
People buy this product to provide income after retirement, because the pension or provident fund received by a retiree may not be sufficient, so he can buy this policy as saving for the future. People may also purchase this policy to provide income payment for their loved ones after their demise.
The buyer can purchase this policy by paying the insurance company a lump sum just before retirement, or if he wants to purchase it earlier he can make periodic premiums until the specific retirement age.
There are many types of annuity
Immediate policy - this plan provides income payments begin within 12 months after the buyer bought the policy. This is recommended for those who are about to retire or have retired.
Deferred policy - this plan provides income payments begin more than 12 months after the buyer bought the policy.
How to save money for retirement?
When I finished schooling and came out to work, I thought if I earn 3 thousand dollars a month I can easily save 1 thousand. If one year I can save 12 thousand dollars, and after 30 years I can save a lot of money. But when I saved some money I bought a car, and I worked hard for 5 years to pay it off. After 5 years I changed a better car and worked hard for it. So I find it is difficult to save money, no wonder some old people said they worked until their retirement, they saved a lot of white hair and wrinkles.
So, if you want to have some forced saving for your retirement, you can purchase a life annuity. Remember to save for the rainy days, I mean save money, not white hair and wrinkles
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