Four Basic Annuity Settlement Options

Investors who wish to invest for their future through settlement options might feel that they need to choose for the best option for they need to secure their future. Well, surely they can because there can be four basic annuity settlement options they can choose from. Knowing what the options are as well as the circumstances you need to consider can be a great help in making the right choice. Below are the four basic annuity types you can consider and let’s tackle briefly each of them.

Straight Life Annuity Option – This type of annuity settlement gives annuity buyers or annuity investors the highest possible income as long as they exist. But, one main disadvantage of this type is that when the annuity holder dies, the annuity dependents or whoever beneficiaries involved can get nothing from it. So, one good advice for an investor before choosing this type is to be secured that he has nothing to do with beneficiaries or he has no beneficiaries at all. This option is good for those persons who have no obligations to look after so they can greatly receive a lot for this annuity option.

Straight Life Annuity with Period Certain Feature – If the first type mentioned above doesn’t care for beneficiaries of the annuity holders when they die; this annuity option is one of the most selected annuity settlement options for it cares about dependents or beneficiaries. The annuity income is not that big but holders can be guaranteed of steady income.

Straight life Annuity with Refund Option – The refund option offers lifetime income. When you want to purchase this type of annuity, the purchase price can be equated to the money you have invested. However, the beneficiary of the annuitant can receive nothing when the annuity income received goes beyond the purchase price.

Joint and Last Survivor Option – This is good if the annuitant has a dependent that exceeds a certain period like marriage couples. Among other types of annuity settlement options, this option serves two masters at a time – the annuitant and the contingent beneficiary. It may offer the lowest income compared to the three mentioned above but it can offer the greatest security for the contingent dependent.