Life Assurance - Annuities

Annuities are the reverse, of life assurance policies. When you take out a life policy you are taking a chance on whether you will die sooner than you expect and ensuring that your heirs will get certain benefits.

In an annuity you gamble on how long you will live: the longer it is, the better return you get on your investment and the less the insurance company makes, though it of course benefits from getting your money to invest.

What happens is that you pay a capital sure to an insurance company which then in turn gives you a regular income until you die. This regular income is likely to be at a rate e which is much higher - even double what you might =get from Ordinary forms of saving or the stock market.

Anyone can take out an annuity, but it is not usual to do so until you have reached or are close to retirement if you are a man, and many companies put a.

minimum age of fifty on those eligible. Women very often use up some of the capital they have inherited from their late husband�s to secure themselves an income until they die.

The older the person taking out the annuity the higher will be the income, for the shorter will be the life expectancy.

And of course the longer you live, the better will be the benefits in relation to the original sum invested with the insurance company.

Men get better rates than women for annuities. Just as women get more favourable levels of premiums in life policies because they tend to live longer than men, so men will get a higher income from a given sum invested in an annuity than a woman for exactly the same reason: he is likely to die sooner than she is.

The rates offered by companies are carefully worked out so that on average men and women get more or less the same benefits overall from their annuity by the time they die. Generally annuities die with their owners who will either have made a profit on the deal with the insurance company, or conversely there may be a loss for the owner, and a profit for the, company.

Over the years, however, various forms of annuities have been developed and the early concept has been modified a great deal.




Annuities

Payroll Giving
It’s all very easy to organise.
Just ask the Personnel or the Payroll Department at your company and, if they already have a scheme, they will give you the relevant forms.  HM Revenue & Customs’ website has a list of Payroll Giving agencies and explains payroll giving in more detail.

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read on: Life Assurance - Today there are seven basic types.

Annuities are the reverse, of life assurance policies. When you take out a life policy you are taking a chance on whether you will die sooner than you expect and ensuring that your heirs will get certain benefits.

In an annuity you gamble on how long you will live: the longer it is, the better return you get on your investment and the less the insurance company makes, though it of course benefits from getting your money to invest.

What happens is that you pay a capital sure to an insurance company which then in turn gives you a regular income until you die. This regular income is... see: Life Assurance - Today there are seven basic types.