What is a Life Annuity?

A lifetime annuity is also called a lifetime guaranteed annuity. A beneficiary who purchases from an insurance company or the government can regularly receive a certain amount of pension during his lifetime. The so-called regular refers to the interval of receiving, which can be annual, semi-annual, quarterly, monthly, or even weekly. A certain amount can be equal or variable. In order to protect the beneficiaries from the effects of inflation, the payment amount of the annuity fluctuates with the market price level to achieve the purpose of maintaining value. Compared with other annuities (such as minimum guaranteed annuities and short-term annuities), life-time annuities have the characteristics of life-time payment and non-refundable. The part will not be refunded, but will be transferred to other longevity people. Therefore, life expectancy is generally better for those who have better health and can live longer, while life insurance is more advantageous for those who are weaker. The role of a life annuity is to enable the elderly to maintain a regular and lasting source of life after retirement, and to make them plan their lives in a planned way, and to support them for the rest of their lives. ^[1]

Life Annuity

A life annuity is an annuity paid regularly during the life of the annuity recipient, that is, only the insured can survive to receive the annuity on schedule.

Lifetime annuity

Ordinary life annuity

Annuities paid regularly only during the life of the annuity recipient, that is, only the insured can survive to receive the annuity on schedule. This annuity agreement:

Starting from the annuity payment date, during the life of the insured, the insurance company pays the annuity to the insured (that is, the annuity recipient) on schedule.

If the insured person dies, the insurance company stops annuity payments and the insurance liability ends.

Although life-long annuity can be protected for life, once the insured person dies, the annuity payment will be stopped immediately. In order to prevent the total amount of annuity from being received due to the premature death of the insured person, there is a period of life-long annuity and the amount of money. Life Annuity.

Lifetime Annuity Guarantee

This annuity guarantees that the annuity is paid regularly during the life of the annuity recipient, and that the period of payment is not less than the agreed period. After the end of the guarantee period, it becomes a pure life annuity, that is, the annuity payment stops when the insured dies. Obviously, the longer the coverage period, the higher the premium.

For example, a 10-year guaranteed lifetime annuity paid at the beginning of each year beginning at the age of 60. The insurance company promises to pay an annuity for at least 10 years, regardless of whether the insured person survives or not. If the insured dies at the age of 65 (that is, the insured has received an annuity for 6 years), the insurance company will continue to pay the policy beneficiary for the next 4 years of annuity until 10 years have passed.

Life Annuity Guarantee

This annuity guarantee is paid regularly during the life of the annuity recipient, and the total annuity payment is guaranteed to be at least equal to the amount agreed in the contract. After the insurance amount has passed, it becomes a pure life annuity, that is, the annuity payment stops when the insured person dies. Obviously, the higher the insurance premium, the higher the premium. How to guarantee the specific amount of insurance should be agreed according to the specific annuity contract. For example, a premium payment policy is usually agreed to be a premium payment; for example, a premium payment policy is usually agreed to be a premium paid (excluding interest).

For example, a life insurance annuity with a premium of 100,000 yuan paid from the age of 60 (the sum of the agreed annuity payments is at least equal to the purchase price, that is, 100,000 yuan). If the insurance company pays only 60,000 yuan when the insured person dies, the insurance company will continue to pay the remaining 40,000 yuan to the policy beneficiary; when the total annuity paid by the insurance company has reached or exceeded 100,000 yuan, the insurance company Decide whether to continue to pay based on the existence of the insured. As long as the insured continues to survive, the insurance company will continue to pay, there is no time limit; if the insured dies, the insurance company stops paying.