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Annuity Settlement Options

When you are ready to start receiving payouts from an annuity, the accumulated value of the annuity will fund your benefit payments. The payout settlement option provision in an annuity contract describes the available payout options. Below, you'll find some of the most common ones.

Straight Life - A straight life annuity provides benefit payments for the lifetime of the annuitant. It continues to pay as long as the annuitant is alive, even if the accumulated value of the annuity has been depleted. However, once the annuitant dies, the benefit payments end, even if all of the money in the annuity account has not been paid out. This payout option is sometimes selected by those who need a maximum amount of income and have no dependents.

Life with Period Certain - A life income with period certain option guarantees that annuity benefits will be paid throughout the annuitant's lifetime. It also guarantees that payments will continue to the beneficiary if the annuitant dies before the end of a pre-set period, usually 5, 10, 15, or 20 years.

Life with Amount Certain - This option provides for monthly income payments to be made throughout the life of the annuitant and continues to the beneficiary until the total payments equal the amount paid for the annuity.

Joint and Survivor Income - This option provides for fixed monthly income payments to be made throughout the lifetime of two (or more) persons. The payments continue until both (or all) of the individuals die. In some plan variations, the payment amount is decreased after the first death. A period certain may also be available with this option.

Joint Survivor with Period Certain - A life income with period certain option guarantees that annuity benefits will be paid throughout the annuitant's lifetime. It also guarantees that payments will continue to the beneficiary if the annuitant dies before the end of a pre-set period, usually 5, 10, 15, or 20 years.

Annuity for a Specified Period of Time - You choose to receive payments for a specified period, from 5-30 years.

Unit Refund Life Annuity - Income for life but pays your beneficiary a lump sum in the event of your death.

 

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