Modern fixed annuities are not your father’s product — or your grandfather’s annuity. Many people believe that annuities pay out just to the person who invests in them, ending the payout at the end of that person’s life.
But not all annuities work like that.
Listen as Mach 1 explains about different types of annuities and what they mean for you and your estate:
Single Premium Immediate Annuities, or SPIAs, are an example of a type of annuity that ends on the death of the investor. This kind of annuity requires a large premium up front and provides you a payout each month until your death. At that point, the insurance company keeps any remaining funds from your investment.
People who choose a SPIA typically don’t need to leave an estate for their families. This form of annuity might be right for single person with no children who wants a predictable income.
There are other kinds of annuities, including some which pay not only the balance of the amount invested but also some interest to your heirs.
It makes sense to get professional advice and to be sure that you know all the details about the annuity you’re buying, including the type of annuity and how it will affect your heirs and your estate.
Hear David and Kyle every weekday on KAMO 94.3 FM at 6:51 a.m.