Secure an Income for Life with an Annuity

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by: BSM
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Date: Sun, 30 Jan 2011 Time: 8:16 AM
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Secure an Income for Life with Annuities

Annuities are offered by insurance companies and provide you with a way to turn your pension pot into an income for life. These are open market options, which means that you do not have to take out an annuity with the same provider that manages your pension. This gives consumers the chance to look around and make sure they can get the best deal possible for their money.

Benefits of Annuities

The main benefit of an annuity as it provides you with a secure income that will last the rest of your life. There is no need for you to worry about running out of money into your old age and you will have until the age of 75 years to invest in annuities. If you do have dependents then it is important to contact the annuity provider and ask what would happen to your invested money if you were to die. Most of the time this money can be transferred to a nominated beneficiary but in some cases the annuity provider will keep the remaining investment. It is important to check this key factor before you sign up so that you can make sure your dependents are cared for after you are gone.

Choosing Annuities

There are lots of different annuity products on the market and the differences in the rates offered can make a significant impact in your income after retirement. This is why it is so important that you take the time to shop around and compare the various annuities available. If you are struggling to understand which annuities can help you to make the most of your money then make sure you get some professional advice. An independent financial advisor can help you to look at the market and understand the many products available. They will also be able to talk you through your retirement plan and help you put in place the funds you will need to achieve your goals.

How to Apply for Annuities

Once you have chosen which annuity you would like to invest your money in then you will need to contact the provider for more details. In most cases all you need to do is sign and return the agreement papers and your lump sum will be transferred across to the annuity account. It is easy to apply over the Internet for annuities and you may also be able to manage your account online. This is very convenient as you will have 24/7, 365 days a year access to your details if you have an Internet connection at home. Make sure you have read through the annuity small print before you sign to confirm that the payment schedule is suitable for your needs. You can have your annuity income paid directly into the account of your choice and this makes it much easier for you to manage your finances once you have retired.

About the Author

John Hughes has been writing on personal finance matters for the last 7 years and often promotes the benifits of getting financial advice