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Single Life and Dependent Annuity – Pensionfinder

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    Single Life and Dependent Annuity

    The common single life annuity plan will run out the day you die meaning no dependents can withdraw on your behalf. However, there are certain annuity options which do provide for your loved ones if you so choose.

    If you were to die unexpectedly it may put an unfortunate financial burden on your family to go along with the emotional one. This is why it may be a good idea to choose an annuity plan that provides for a specific person or people including children who would benefit from payments until they reached 23 years of age. Below is an example of two annuities: one that pays only you with the other designed to benefit dependents after you die.

    Annuity For You Only
    These types of annuities only give you payments and will automatically stop when you die. An exception to this rule is the guaranteed period choice which pays a dependent the remainder of your annuity fund if you die before the guaranteed date has expired.

    Incidentally, the majority of providers will not allow you to choose the Purchased Life Annuity option with a guaranteed period. With these guaranteed periods, either you or a dependent will benefit with no money going to waste.

    It should be noted that single life annuities offer a greater level of income than ones which take care of dependents also.

    Annuity For Dependent
    Not only do you benefit from a regular income, a dependent of your choosing will too as long as they outlive you. You will be required to outline the exact amount of income to be set aside for your dependent at the start of the policy. There is no limit to the amount you can set aside for them. You could decide to leave one-quarter of your income from the annuity or the entire amount if you wish.

    This provides a safety net as they will be looked after financially if you die before them with a regular taxable income available to them from your annuity. If your dependent is legally a child, they will receive benefits from your annuity until they are 23 years old.