Without a guarantee, unless you have opted for a joint life annuity
, your income will stop upon your death, even if you die shortly after taking it.
In all cases, the life annuity
is treated as a single payment.
This retirement strategy is a consumption and investment plan that attempts to closely mimic the payout from a generic life annuity while allocating investable assets to minimize or limit the probability of lifetime ruin.
Our proposed index goes beyond a (trivial) cross-sectional average of life annuity payouts offered by different insurance companies.
A life annuity with a guarantee period can eliminate an annuity's most commonly quoted risk, and can therefore be a very conservative investment that can play a stabilizing role in one's overall retirement plan.
Say you purchase a life annuity for yourself with a guarantee period of 20 years, with the idea of guaranteeing that your children get any unused remainder of your principal.
A non-smoking male aged 65, with a pounds 30,000 pension pot, would get around pounds 166 a month from a single life annuity with a five-year guarantee.
The same man, with a spouse aged 62, and the same size pension pot, would get around pounds 148 if he chooses a joint life annuity.
The value of a single life annuity
of $1 yearly, paid continuously, is
Under the special grandfather rule, the decedent's excess accumulation is the excess of (1) the decedent's aggregate interest over (2) the greater of (i) the decedent's remaining unrecovered grandfathered amount as of the decedent's death or (ii) an amount equal to the present value of a life annuity
CROWN LIFE to administer Confederation Life annuity
As compared to a normal annuity, by age 65 the policyowner accumulates $1,356 more in surrender value and, if he elects a life annuity
at that point, his annual annuity payment for life is $101 greater.