Guaranteed Income: Know Your Options
Understand the options for your income plan.
If you own a life insurance policy or an annuity (or are the beneficiary of one), you have a choice to make about what to do with that money. One option may be to take the money in cash. And while that may sound enticing, there are other options that could be a better fit for your financial situation and long-term goals.
With an annuity, you can convert some or all of that money into a steady stream of predictable income that’s guaranteed regardless of the ups and downs of the market, regardless of how long you live. That’s flexibility cash can’t provide.1
How can you create guaranteed income? When you choose to convert your money, an income plan will be personalized to meet your specific needs. You can begin receiving payments now or in the future, and you choose how long you want those payments to last: for a specific period of time or for life. You can choose to receive guaranteed payments for your lifetime only; or if you want a guaranteed number of payments to be paid to you or a beneficiary, you can choose to receive guaranteed payments for up to 20 years or for your lifetime, whichever is longer.
For example, if you chose to receive 20 years of guaranteed payments and you pass away five years after payments begin, your beneficiary would continue to receive payments for the remaining 15 years. If you live beyond 20 years, payments would continue for your lifetime. You could also choose to receive payments that continue as long as both you and a spouse (or whomever else you choose) lives. With this option, you simply decide how much you want the survivor to receive after one of you passes away.
You may decide you need income only for a specific period of time. This is called a “period certain.” Let’s say you need help bridging the gap between the time you retire and the time you begin receiving Social Security or pension benefits; a period certain payment option can help you do that.
And finally, you could choose to simply receive a certain amount of money each month until your account is depleted.
However, if you are not ready to make a decision on what to do with your money right now, you can simply put it into a plan that earns interest and receive payments at a later date. This is called “interest income.”
The bottom line is this: You choose the features that will help you create more security and predictability for your financial future. If you’re unsure about which income plan might be the best fit for you, talk with a financial professional. And be sure to work with a company that’s been awarded the highest financial strength ratings to any insurer … one that will be there when you need it most.
1Applies to fixed-income plans only. Variable rate plans participate in the market.