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An annuity consists of a series of equal payments that are made regularly, such as every week or every month. In terms of the time period under which the recipient is covered, there are two options from which to choose from: certain or life.
In the case of a certain annuity plan, the payments from the annuity are paid out over the course of a predetermined timeframe. If the recipient of the certainl annuity plan dies before the established timeframe has reached its completion, then the remainder of the annuity is paid out to a named beneficiary. (If a beneficiary hasn't already been picked, one will need to be picked before signing up for a certain annuity plan.) In the case of a life annuity plan, the payments from the life annuity are scheduled to be paid out for the remainder of the recipient's life. After the death of the recipient, the annuity payments cease.
We have the luxury of not knowing when or where we are going to die, which might make it difficult to choose between a life annuity and a certain annuity. Fortunately, you are afforded the ability of combining the two annuity plans into one through a life certain annuity. With this annuity plan, you can establish a life annuity plan with a 'certain period' of 10 years. If you live beyond the 10 years, then you continue receiving annuity payments until your death. If your death occurs before the certain period comes to an end, then your beneficiary receives the remainder of the annuity payments. I.E, if you have a certain period of 10 years and you die after 5 years, then your beneficiary will continue to receive payments for the remaining 5 years. This is an excellent way to provide for both your future, and your beneficiary's.
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How does this compare with an INSURANCE ANNUITY ?
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