PINKNEY FINANCIAL SERVICES

Income Annuities

Retirement & Pensions

Income Annuities

When an individual purchases a life annuity, they make a lump sum payment to an insurance company or a financial institution where annuity payments are a combination of the investor’s principal and interest paid by the insurer. For this reason, annuities are considered to be a reliable source of income. In return, the insurance company guarantees to pay the annuitant a regular income for as long as they live. This income is typically paid out on a monthly basis, although other payment frequencies may be available.

Income Annuities

Life Annuity is created through a contract between the annuity provider (usually an insurance company) and an investor. The annuity produces a stream of payments over a period of time. It is a form of retirement income and is often used as a means to ensure financial security during one's retirement years.

Different Types of Life Annuities

  • Life Only Annuity: This type of annuity pays income for the annuitant’s lifetime and ceases upon their death. There are no provisions for payments to beneficiaries after the annuitant passes away. This is comparable to a pension plan for one person.
  • Joint and Survivor Annuity: This annuity provides income for the lifetimes of two individuals, typically a married couple. The income payments continue as long as either individual is alive. This type of annuity ensures income for the surviving spouse after the first spouse passes away. This is comparable to a pension plan for a couple.
  • Term Annuity or Guaranteed Period Annuity: With this type of annuity, the income payments continue for the annuitant’s lifetime, but there is a specified guarantee period (e.g., 5, 10, or 15 years). If the annuitant passes away during the guarantee period, the income payments will continue to their beneficiaries for the remainder of that period. This is comparable to selecting income payments for a certain number of years indicated by the investor.

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For 26 years Pinkney Financial Services has been a very important part of my financial future. I’m most grateful for everything they have done for me over these many years.
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