What are Single Life Annuities?
When it comes to taking out an annuity there are a number of things that you traditionally need to consider. Once you purchase an annuity it is a plan that you will have for the rest of your life, so it is important to take the time and research your annuity correctly, to ensure that you are getting the best plan for you, at the best price.
Single life annuities offer a plan which can be tailored to the suit the needs of the individual and they are entirely independent – they pay only to the person who is taking out the annuity and once this person dies they cease to pay at all. As they do not have multiple beneficiaries compared to a joint life annuity, single life annuities potentially have the chance to give a much better return for your investment as it is only spread over one person rather than two.
Who might choose a Single Life Annuity?
Single life annuities can prove to be a good option for people who are single and do not have a partner or dependants. This annuity can provide a good quality income for the individual dependant on their circumstances. They can provide a higher return than joint annuities as they are only reliant on one person and they do not have any insurance put in place for accidental or unexpected death – in this situation the money is retained by the annuity provider.
Single life annuities take into consideration your health, age and your life expectancy – these are the key factors that are combined to draw together your annuity income, and once this information has been drawn together you will be given a figure for your retirement income.
What are some drawbacks?
Although single life annuities may provide popular with individuals, when it comes to families there are several drawbacks to this type of plan. If the annuity holder dies unexpectedly, or early there is often no type of insurance put in place to help out the family members, partners or beneficiaries. This can leave them heavily out of pocket if no other plans have been put in place. For this reason, many families opt for a joint annuity as it will cover right up until the death of both partners.