In the insurance parlance, Annuitant is defined as a person who benefits from a pension or annuity. It can also be said to be a contract with an insurance company which is designed to give payments to the holder of the policy at specified intervals. The insurance payments are usually made after retirement.
There are two types of annuities - fixed annuity and variable annuity. A fixed annuity ensures a certain payment amount whereas a variable annuity does not provide for a certain payment amount. Both the annuities are safe and low yielding. The advantage of the annuity is that it provides a higher payment of the current value at the time of death. In case an individual dies before the policy period is over, the beneficiaries are the heirs who receive the accumulated amount of the annuity. The payments are subject to income and estate taxes.
Factors Affecting Insurance Terms and Rates
The life span of the person affects the annuity. Date of birth is the important factor which is used to determine the annuitant's age. If the annuitant is relatively young, the period of insurance will be long and therefore the premium will be low. Another aspect that an insurance company looks into is the sex of the annuitant. Women generally tend to live longer then men for which the insurance company has to budget in a different way.
Getting yourself insured appears to be a complicated affair, but there is hardly any complication involved. Before an insurance company offers you insurance, it needs a horde of information to determine the insurance rates. The insurance company is taking a calculated risk on your insurance. They need information such as your age, medical history and life expectancy in order to make a proper insurance offer to you. There are no legal complications involved in the insurance policy for which you may have to hire legal experts.
It is you alone who knows which insurance policy is good for you. Two types of insurance - term life insurance and whole life insurance are very popular life insurance options available. Term life insurance protects your family from outstanding debts including mortgage, and also provides security cover for children in case of your untimely death.
Term life insurance has low premiums but does not build any cash value. How long you want the "term" to be depends upon your requirements which will be decided by your age, amount of outstanding debts, and when do you think you want to accrue the benefits of the policy. If you are interested in building cash value over a period, then whole life insurance is the better option.