What is a Simple Annuity?

A simple annuity is defined as an investment vehicle designed to accept, grow and, upon annuitization,  payout a stream of income.  Annuities are offered by insurance companies.  The insurance company is in charge of your money and is contractually obligated to see that you get paid the agreed upon amounts.

For you linguists out there the word annuity comes from the Medieval Latin word “annuitas,” meaning yearly or year.

In short a specified amount of money that is paid during specific intervals. The amount depends on the type of annuity and amount of funds you make available.  Annuities are often a major part of retirement income streams, providing dependable income.

You can receive a set monthly amount for the rest of your life if that is how you wish your annuity to be set up.

An annuity can be paid at the beginning of the term:Annuity Due.

Or it can be paid at the end of each term: Ordinary Annuity.

Variety of Options

  • Pay out as long as one’s spouse is alive…
  • Pay out for a fixed amount of years regardless if the investor passes away during the term…
  • Fix in high interest rates to give you an advantage when rates are low…
  • Guarantee a payment to your heirs…
  • Some will not pass to your heirs, but provide you with better payment options while alive…

The above are some typical examples.

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