Here’s the Deal

Consumer Voice - - Immediate Annuity Plans -

Of­fered by life in­sur­ance com­pa­nies, a life an­nu­ity is an an­nu­ity of a series of pay­ments at fixed in­ter­vals, paid un­til the pur­chaser (or an­nu­i­tant) is alive. It is a long-term in­vest­ment that sup­pos­edly pro­tects you from the risk of out­liv­ing your in­come. Through an­nuiti­sa­tion, your pur­chase pay­ments (in­vest­ment made to­wards buy­ing a plan/pol­icy) are con­verted into pe­ri­odic pay­ments that can last for life.

Be­ing a con­trac­tual fi­nan­cial prod­uct, an an­nu­ity is de­signed to ac­cept funds from an in­di­vid­ual and en­sure that the in­vest­ment grows and its pe­ri­od­i­cal pay­ments are made to the in­vestor/pol­i­cy­holder through a stream of pay­ments via a pay­ment mode cho­sen by them.

The pay­ment stream from the is­suer (in­sur­ance com­pany) to the an­nu­i­tant has an un­known du­ra­tion that prin­ci­pally ends af­ter the demise of the an­nu­i­tant. Af­ter death, the con­tract ter­mi­nates and the bal­ance re­main­ing of the fund ac­cu­mu­lated is for­feited un­less there are other an­nu­i­tants or ben­e­fi­cia­ries in the con­tract.

Some life in­sur­ance com­pa­nies of­fer crit­i­cal illness ben­e­fit (cov­er­ing any­where be­tween 6 and

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