By: Mike Anderson
Submitted: 2011-09-01 02:26:53 | Word Count: 522
Entire life, some or the other worries surround you. When you retire, you think that's the end of your fretful life, but no that too is not and end, but the beginning of another trouble-ridden phase of life. Previous worries were mostly because of social or family issues, but the trouble after retirement is due to the financial instability in the lifestyle. Seeing the problems that the senior citizens face after they retire, fixed annuity schemes have been introduced. fixed annuities are the first and foremost choices of the old retirees as they seem to be more reliable than the other annuity plans.
Fixed annuity, in simple words, can be defined as a contract that the annuity seeker needs to sign with the insurance companies in order to get enrolled into a policy that guarantees to bear significant interests from time to time. In addition, the lenders also give the individuals an opportunity to choose guaranteed income from numerous available options. Fixed annuities enable the retirees to utilise their savings, which they make throughout their service tenure and buy the annuity scheme and thereby ensure regular stream of income as soon as they withdraw or receive their first disbursement from the insurance companies.
[ advertisement ]
The annuitants are free to choose their desirable mode of distribution. In case of fixed annuity, there are two models, which the individuals can opt from. These modes include immediate or deferred. The immediate type of annuity allows the retirees to begin receiving the regular income instantly as soon as the initial premium and interest is paid out. Whereas, in case of the deferred fixed annuity, the situation is completely different. In this type of deal, the individuals are not allowed to receive the money till the end of the specified term. In fact, the interest is also compounded as done in case of the typical account managed for retirement savings.
Some of the attributes exhibited by the fixed annuity schemes are as follows:
The annuitants are required to pay only a single premium and no more further investments, until another annuity deal is required to be purchased.
The rate of interest is guaranteed and fixed for the specified number of years.
Lower degree of risk is involved in case of the fixed annuities. It can only prove to be a bad investment if the company itself is a fraud.
Provides significant security to your post-retirement life, being a useful source of retirement savings.
3 to 10 percent return is guaranteed. However, at longer terms, the scheme offers better returns.
It is an income for lifetime.
The process is completely free of any hassle. Once you sign the contract and pay the premiums, you start receiving the pay cheques.
The facility of life insurance is also attached to it. Save money over there and offer death benefit to the one you leave behind after death.
In a fixed annuity deal, you can invest as much as you want.
After your death, the beneficiary continues to receive the benefits of fixed annuities.
