Many people take help of pension plans to ensure a pleasurable life after bidding adieu to their work. After we retire, our source of income stops. Therefore, we start making our retirement plans several days earlier prior to retiring. Moreover, today’s pension plans are no more convincing that can ensure a life free of tensions. We all try to accumulate loads of cash in our savings account so that our families can remain miles from monetary worries. Therefore, the option of deferred annuity can certain score higher in comparison to these typical pension schemes.
So, what's a deferred annuity? There are various types of annuities in the financial market and deferred annuities are one among them which is drawn between an annuitant and an insurer in the form of an agreement with the intention to bag a considerable return on the investment. On behalf of the annuitant, the payment can be either regular or a one-time investment to buy an annuity. However, the choice completely depends on the annuitant's your financial ability.
One who is new to annuity must know that it's a product sold to people by an insurance company with the intention to earn profit. Well, it’s also true that individuals purchase annuities for a better future. So, it’s crystal clear that annuities benefit both the receiver and the provider.
However, deferred annuity always stands as the most preferred choice for customers. The applicant here is permitted to postpone the payment for income and arrange a new date of income disbursement. Till the money is not extracted, the interest will keep accruing to the investment fund. Hence, the level of income will keep rising with the passage of time.
There are two types of deferred annuity - fixed and variable. Whichever policy you are going to opt, it’s better to take advice from an annuity expert.