Which Type of Contract Liquidates an Estate Through Recurrent Payments?

Which Type of Contract Liquidates an Estate Through Recurrent Payments?

An annuity type of contract liquidates an estate through recurrent payments. The basic purpose of an annuity is to liquidate an asset through periodic payments.

Annuities offer cash contracts with an insurance company that is primarily based on equity investments and should be undertaken only as a long-term program.

The intention is to provide income to the “annuitant” at some future point, later in life. An annuity can be structured to provide a specific amount (basic income payment) at regular intervals for a specified period of time or for the entire lifetime.

Annuity income can be used for retirement or to provide a steady income for the rest of the life of a surviving spouse. Annuities can be tailored specifically to individual needs.

What Is an Annuity?

Nationwide annuities are designed to help you increase your retirement income. They are long-term contracts with an insurance company where you invest your money.

In return for your investment, you receive income in the form of regular payments.

On Which Factors Annuity Payment Based?

All types of annuity are based on two primary factors: when you want to start receiving payments and how you want to grow your annuity.

The amount of annuity payment is based on the following three factors.

• Income period
• Initial principal
• Interest

Types of Annuity

There are several types of annuity products available to choose from. Whether you’re looking for income options, inheritance planning tools or spouse protection, your financial professional can design a plan to meet your specific goals.

There are four basic types of annuities to meet your needs: immediate fixed, immediately variable, deferred fixed, and deferred variable annuities.

Which Is Not Included in an Annuity Contract?

Accidental Death and Dismemberment. All of them are included in an annuity contract except the Accidental Death and Dismemberment (AD&D) rider.

What Type of Annuity Has a Cash Value That Is Based Upon the Performance of Its Underlying Investment?

Variable Immediate Annuities. With variable immediate annuities, payments are based on the value of the underlying investment. The payment is made for the life of the annuitant(s) for a specified period,

What Type of Annuity That Can Be Purchased With One Monetary Deposit Is Called?

Immediate annuity. The type of annuity that can be purchased with a monetary deposit is called an immediate annuity.

What Is the Main Purpose of an Annuity?

An annuity is a long-term investment that is issued by an insurance company and is designed to help protect you from the risk of reducing your income. Through annuity, your purchase payments are converted into periodic payments that can last a lifetime.

Final Words

Investing involves risk, and may reduce the value of your investment. All guarantees and protections are subject to the claims-paying capability of the issuing insurance company, but the guarantee does not apply to any convertible accounts that are subject to investment risk, including the potential loss of principal.

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