What is a Survivor Annuity?
Posted in Annuity , Life Insurance , Life Insurance Riders
April 23rd, 2009
If you are in the process of planning your retirement, you are probably now considering things you never thought you would. One such question may be, “What is survivor annuity?” Survivor annuity is a type of annuity that provides participants a source of fixed income every month. Typically, spouses opt into survivor annuity plans and when one of the partners die, the other will continue to get a check in half of the fixed amount for the rest of their life.
Who Chooses Survivor Annuities?
Survivor annuities may not be for everyone, but by asking yourself ifyou think that one spouse is more than likely to outlive the other spouse for more than a decade will help to more easily decide if this type of investment strategy will work for your situation. It is is challenging to predict the life span of a human being, however some things to consider when trying to decide on a survivor annuity is:
- Age difference between the couple
- Women tend to live longer then men
- Health history of the couple
- History of longevity for the couples family
Carefully Consider Survivor Annuities
Still not sure about selecting a survivor annuity investment plan? You also need to ponder what other types of financial resources or revenue streams you have set up. If you have enough money already set aside in a good life insurance policy, a survivor annuity may not be a viable option for you.
Like all other annuities, a survivor annuity is a contract made between you and your insurance provider that guarantees you a fixed monthly return assuming your premium payments were made regularly. Survivor annuities generally offer a way to invest on a tax-deferred basis and may also include a death benefit payout. You might even want to look into life insurance riders if you decide to go with a life insurance policy instead. If you are interested in a survivor annuity strategy for you and your spouse, it is best to consult with an insurance specialist.