Annuity Contracts Insure a Lifetime of Monthly Income

Annuity contracts are an excellent way to take a lump sum of money received, for example through a lawsuit or through an inheritance, and use it to create a monthly stream of income. The income created can then be utilized to live off of on a monthly basis. The money can be used immediately as a source of monthly income or it can be deferred until a later time, such as retirement.
Annuity contracts can be designed to meet your specific desires and needs. We hear of so many people receiving inheritances, winning money, or receiving money through a lawsuit only to have the entire sum disappear within a very short period of time. An annuity (or an annuity contract) is sold primarily by insurance companies as an investment. Two key types of annuities can be chosen from to provide security for your future based on a large sum of money received; a fixed annuity contract or a variable annuity contract can be utilized, here are the details of both.
This money can be placed in a fixed annuity contract. This type of annuity contract provides you with a sum of money each month for a certain period of time; once the annuity payments begin that will remain the same until the completion of the term in the contract and not even inflation will create an increase in the payment received. When you select a fixed annuity contract, you can also select to receive a deferred payment rather than an immediate payout; meaning that you can select to have payments begin to be made to you or to an heir in a certain number of years rather than immediately. These payments can begin for example after 10 years or at the time of your retirement. Fixed annuity contracts can be used as tax-deferred investments and are a great way to confer a large lump sum into an income stream that will sustain you for many years.
A variable annuity contracts will provide you with investment products in addition to a monthly income. With a variable annuity contracts you are entitled to tax deferral on all earnings, you have the ability to name beneficiaries to receive any remaining balance in case of your death, you were able to receive payments for life based on your life expectancy, and you are guaranteed provision in insurance as well. This type of annuity contracts gives you the ability to generate monthly income and increase your capital through investments in stocks and bonds.
Your large sum of money can be created into a life time of income for use starting immediately or it can be saved until retirement when you can begin receiving monthly life sustaining increments of income. Your choice to have the money saved and handed to you each month is an excellent way to defer taxes as well as to insure that the money lasts you as long as you desire. Annuity contracts can create a plan that will benefit you and your loved ones financially for a lifetime.

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