Life Assurance - Today there are seven basic types.

1 Basic annuities, which die on death.

2 Guaranteed annuities, which offer lifetime income and also some capital payment on death.

These cost more than straight annuities, but give people the satisfaction of knowing they will be able to pass something on to their heirs.

3 Immediate annuities, which start paying out not immediately as the name suggests, but very quickly after the lump sum is paid in.

As a rule the first payment follows in about six months and further payments at six-monthly intervals.

Obviously the older one is, the more likely one is to need this kind of annuity and it is favoured by widows.

4 Deferred annuities, which are now very popular with the self-employed as a contribution towards their pensions These are bought many years ahead. Payment is usually by instalment like a life assurance policy.

5 joint survivorship annuities, which are taken out by husband and wife. The amount paid out usually falls by a third after the first death.

6 Reversionary annuities, which are another form of joint annuity.

They can be taken out by an individual if they wish someone else to have an income in the event of their death. Brothers and sisters, unmarried couples buy them, as do middle-aged children for elderly relatives. If the purchaser of the annuity dies first, the person to whom the annuity is assigned gets the income, but if the latter dies first, the annuity dies.

These are not a particularly common form of annuity and should not be taken out without taking professional advice.

7 Minimum or temporary annuities can combine the best of all worlds.

They guarantee an income for a fixed number of years, say, five or ten.

At the end of the period there will be an option. to a cash lump sum, or a continuation of the income. During the period annuity rates may have become more favourable and the cash can be used to buy another annuity.

Of course one is taking a chance on this happening though the risk is minimal as the income can continue.


Today there are seven basic types

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 - tax points

1 Basic annuities, which die on death.

2 Guaranteed annuities, which offer lifetime income and also some capital payment on death.

These cost more than straight annuities, but give people the satisfaction of knowing they will be able to pass something on to their heirs.

3 Immediate annuities, which start paying out not immediately as the name suggests, but very quickly after the lump sum is paid in.

As a rule the first payment follows in about six months and further payments at six-monthly intervals.

Obviously the older one is, the more likely... see: Life Assurance - Today there are seven basic types - tax points