Definition: A series of periodic payments. These periodic payments are made to the covered individual who would have made a single premium payment to us.
How does it work?
The client pays us one large lump sum premium. We invest this premium payment and make periodic payments to the client based on an agreed payment plan.
You should note the following about an Annuity:-
- It is the flip side to insurance, usually used to provide the client with a form of income during their golden years.
- The annuity can be immediate - where payments start the next annuity period after the contract is issued.
- The annuity can be deferred where payments start more than one annuity period after the annuity was purchased. Deferring the annuity allows the premium payments to build interest and this gives the annuitant a larger payment than would be available if it were immediate.
- A beneficiary can be assigned, so your love ones will still benefit from the annuity after you pass away.