Four Types of Annuity Payouts

Selling your structured settlement

Anyone thinking of buying an annuity who has done their research knows that it’s a pretty big commitment. Some people are okay with this, considering that 93% of people who own one reported that they still have their first annuity. This might be because they enjoy having one and it works well for them, or it might mean that they’d rather wait for the target date than withdraw early and pay the penalties. What are annuities? They’re just an insurance product that people often buy to help manage their money in retirement. Either way, one thing to consider when you’re thinking about buying annuities is the way they’re going to be paid out to you in the future. Here are the four most common methods of payouts for annuities.

1. For a Guaranteed Period
One way annuities are paid out is for a guaranteed period of time. This might be five years, it might be 35 years. If this is the option you choose, you will receive payments of the same amount and at regular intervals for the amount of time you want.

2. For the Rest of Your Life
An alternative to receiving payments for a previously decided number of years, you can opt to receive payments just for the rest of your years. The amount of the payments you receive, then, are calculated using factors like your life expectancy and the amount of money you have invested in the annuity. These can also be variable or fixed annuities.

3. A Combination of the Two
If you’re unsure of what your life expectancy is, you might opt for a combination of a guaranteed period and a life style payout. This means that you’ll receive consistent periodic payments for the amount of time you decide on, and if you die before that time is up the payments will go to a beneficiary.

4. To a Survivor
This type of payout is use for joint or survivor annuities. This type pays out the funds to a partner or spouse for the rest of his or her life after your death. Married couples often opt for this type of payout.

There is a way to avoid having to wait for these payouts. If you choose to sell, you may get an annuity lump sum payment from a company rather than waiting for the funds to be dispersed to you.
This is a great source for more.