January 3, 2011 11:10 am
How to purchase Annuity from Life Insurance companies?? Annuity with return of capital or without return of capital or annuity for lifetime…etc which one to choose?
Which annuity option to choose will depend on the situation at the retirement. Suppose you wish to have the return of purchase price i.e. capital as option(if you want to leave money behind) then naturally the annuity amount will be much less than the annuity for life option, about 60-65%. But if you can not live on this much of money but need more then you don’t have the choice but go for the life annuity only. So the situation near the retirement only will decide what is good . Insuance companies allow you to even change the option you have initially chosen when buying the policy upto 6 months before the pension starts.
Whether one should at all buy a differed pension plan is another question. But other authors have written about in in other querry posted by you and my opinion is similar to what they have said about a pension plan.
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