Annuities help to plan for your retirement. What is the need to buy an annuity today, why not later? This is the most commonly asked question. Annuities have become popular because it ensures the core money remains intact and the interest comes to the buyer at regular intervals, it could be every month or yearly, the choice is yours. Buy an annuity today so the payment for every month is less, as the time period to pay the policy is longer. An annuity is a fund that you contribute to while you have a regular income and it assures you a certain rate of interest and guarantees you the income you shall receive from it. The advantages of buying an annuity has several advantages, including that the money increases with the interest rates the life annuity gives, and the money is tax-free until it is withdrawn from the life annuity. In other words it means the money in a life annuity will not be taxed until you retire.

One can buy an annuity during one’s working life or if you have not done so then you can buy an annuity all at once. This is popular with people who want to retire early or for those who haven’t planned their retirement. After buying an annuity it is recommended that you don’t withdraw the money earlier than the maturity date, otherwise you will lose money.

When buying an annuity remember a female receives lower monthly payment as compared to a male as they are expected to live longer. An older person will get a higher monthly payment as they are expected to have shorter life expectancy. An annuity with capital protection will pay less than one without capital protection.

The often-asked questions are what will happen to the money invested if an annuitant dies at an earlier age or lives for a longer time? It depends on the policy – did it have a capital protection and the type of policy. In recent times some insurance companies are known to return the capital amount after deducting the annuity payments. If the annuitant lives for a longer time the payments are paid regularly, sometimes the insurance company pays more than the money invested. This money comes from people who die at a younger age and leave behind a part of their capital sum in the fund.

While buying an annuity check if your policy is a non-participating or a participating policy. A non- participating annuity gets a fixed monthly sum and is not eligible for any bonus, while the participating annuity policy gets a less amount of payment but is eligible for a bonus. So buy an annuity today but carefully research and consider the best option for you; consulting an annuity broker would help you make an informed decision.