Life With Refund Annuity

Refund annuity is an annuity plan that makes stable payments to the insurer throughout his/her life, but more prominently, assures the return of ‘original amount’ paid to the annuity. This way, if the person (annuitant) dies before the original lump-sum is paid; his survivors get the remaining amount. The premium for refund annuity plans is more often than not higher than various other annuity plans. A refund annuity plan may be appropriate if:• You are thinking about retiring from work.• You want to buy an insurance plan that renders stable payments, as long as you live.• You are shelling out too much on income taxes.• You think that your ‘social security’ benefits are not adequate to finance your retirement.• You wish to conserve principal amount.• You wish a life-time income stream.How Refund Annuity Actually Works?In a refund annuity plan, the insurance company pays you throughout your entire life. This contract also assures a ‘refund’ if the annuitant dies prior to the intervallic installments of the total original annuity amount. The individuals’ who opt to buy this annuity type receive fantastic refund stipulations and death advantages. Primarily, there are two types of annuities that are most popular these days. The first plan consists of an annuity in which the payments are made throughout the lifetime of the annuitant. However, incase the individual passes away prior to ‘payout’ for minimum number of years, the payments still continue until the specified time-period is up. Such annuities are best known as ‘installment refund annuity’ plans.In 2nd type of annuity plans, if the annuitant dies before receiving the minimum number of disbursements or before pre-determined time period, then, premiums are refunded to beneficiaries, either in whole or in part.Refund Annuity Payment Options In a refund annuity plan, the time period for which the person will continue receiving income is similar to straight life annuities, which clearly means the annuitant is paid all through his lifetime. However, there is a significant difference between straight life annuities and refund annuity plans that the latter assures a payment which is equal to the overall cost of purchasing the plan. If the person lives longer than his ‘life expectancy’ upon the commencement of payments, his benefits may be more vital than the expenses incurred for buying the annuity contract.However, in case the annuitant dies before being remunerated the sum, then, beneficiaries of the individual will be granted the difference either in installments or in cash.With simple annuity plans without refund option, you are assured high periodic payments, which mean the amount is higher than what you can receive from refund annuities. Furthermore, if your physical condition is satisfactory and you’re not suffering from any serious ailment, then, annuity plan without refund option is more appropriate.So, if you are thinking of a long term investment for the retirement, and want a plan that would meet all your needs throughout your life, then, refund annuity is just the right option to select.