An annuity is a contract between an individual and an insurance company. Annuities are the schemes that have been introduced with an aim of providing a fret-free life to the senior citizens after retirement. Being dependent on family members and relatives compels them to kill several desires rousing in their heart. Annuities are the programs which act as the most effective financial solutions for the retirees as they allow them fulfill all their desires whenever they feel like doing so. These schemes allow the old aged individuals receive a steady income after retirement either for lifetime or for a specific period of time, as per their choice.
Due to the benefits that they provide, these plans have grabbed the attention of majority of retirees to make sure that their old age is free of any kind of financial worries. The payment that you receive after enrolling for these annuity deals is not a sudden process, but it is, actually, the result of the investments that you make during your service tenure. The money that you invest acts as the ultimate source of income for you in case of the plans of annuities. It is up to you whether you choose to receive the income on monthly or quarterly or annual basis or opt to obtain a lump sum at once. The payment size, however, completely depends upon the length of your payment period.
Two types of basic annuities are there, namely, fixed and variable. In case of the former, the payout that you choose is fixed and guaranteed, while in case of variable annuity, the stream of paying out is determined by your annuity's performance. However, it is up to you which of the above options do you go for. Before involving yourself in the deals of annuities, you must research all its aspects carefully and choose a relevant plan based on your basic needs and requirements.