When you purchase an annuity, you are putting savings in an account that you can later on receive as periodic payments particularly during your retirement years. This is also called annuity payment which is a series of equal, regular cash flow you will receive like on a monthly basis and will end depending on the kind of annuity you purchased. This means that an annuity payment must the received at the same amount for each period. You must also be receiving the annuity payment at periodic intervals, like on a monthly basis.
The setback with straight life is in case you die before you have used all the money in your account, no beneficiaries or dependents can collect the rest of your annuity payment. With this to consider, the straight life option is only advisable if you don't have any beneficiaries and you want to receive the maximum income from your annuity.
Another option of receiving annuity payment is the Joint and survivor type where you will receive payments for the rest of your life but after your death, the insurance company will pay your partner annuitant for the rest of his or her life. The refund annuity is another option for annuity payment which provides income throughout the rest of your life. This is getting more popular nowadays because if you die before you have exhausted all the money you have put into your account, your designated beneficiary will receive the annuity payment that you have not yet received.
The flexible premium fixed annuity is yet another method of receiving annuity payment and what makes this appealing is this is tax-deferred, helping you because your money grows faster and accumulate for your retirement. In other words, your money is not affected by market fluctuations.
The last type of annuity payment is the flexible premium deferred annuity which is a variable accumulation annuity that helps you to build your nest egg for long-term goals or your retirement. With this, you have the flexibility in how much you want to receive and how regular. You also have adjustable options in investment as well as in transferring your money and having access to your account information.
