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Funding Your Retirement: Understanding The Function Of A Lifetime Annuity

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If you're looking for a way to prepare for retirement without having to rely on government retirement funds, you might want to look into the possibility of a lifetime annuity. Lifetime annuities are a private insurance option that can provide you with some retirement peace of mind through the private insurance sector. Here's a look at what you need to know about lifetime annuities to decide if this might be right for you.

Lifetime Annuity Basics

When you buy a lifetime annuity, you're essentially buying an insurance policy. It's designed to pay out monthly starting when you retire. The key to this fund is that you pre-pay the policy with a substantial policy premium. You can fund the policy using CDs, stocks, or even bank savings. Once paid, your benefits are guaranteed to pay out throughout your retirement. You won't have to have any kind of medical exam, nor is this funded or secured by the government. It's a private annuity for your retirement.

Benefits of a Lifetime Annuity

The biggest benefit of the lifetime annuity is that it gives you peace of mind that you'll always have those payments to count on. Even if the government's retirement fund should run dry, your lifetime annuity won't. And, though you can't borrow against the premium, you can get an advance on your future payments in the event of an emergency. You have to reach a certain age before you can request an advance, but the option is there.

Also, if you should die before your monthly payments reach the premium amount, any remaining premium balance will be paid directly to your heirs. If you live long enough that your monthly payments exceed the premium you paid, don't worry – your benefits are locked in until your death.


The initial premium investment for these policies is substantial, so you must have significant means to secure a policy like this. And, the insurance company will then invest that premium to generate greater profits and to increase the payment fund for people who outlive their policy premium. This makes the lifetime annuity something you should only consider if you have significant investment funds, stock that you can sell, or CDs that you can cash in. The more you put into the policy, the greater your monthly return will be.

As you can see, lifetime annuities are beneficial for many people, particularly those who don't want to depend on government retirement funds. Talk to an agency today such as Fogel Capital about the availability of these policies where you are.