Income Annuities (SPIA or DIA)
If you need income now, you'll find the hghest guaranteed income in an immediate annuity (SPIA).
If you want to lock in income to start at a specified date in the future, a delayed income annuity (DIA) will likely deliver the higherst possible guaranteed payments.
Both products provide a stream of guaranteed income payments for the life or joint lives of the annuitant(s). It is an irrevocable contract in which the insurance company promises to make income payments to you for as long as you live, or for a specified period.
Finding the best payout
Since there are several insurers competing in this space, it is critical that we find the highest payout possible. Even $20-$30 more dollars per month ad up to thousands over a lifetime. It is also highly recommended that when you look for lifetime payouts, you choose as highly rated a carrier as possible. Here's an example of an immediate annuity spreadsheet that we prepare for you.
Questions to ask of your client:
- When do you need income? Now or in the future?
- How much income do you need? (or - how much of a lump sum can you utilize to achieve the highest income possible?)
- Are the funds qualified (IRA, 401k, etc.) or nonqualified (post-tax savings & investments)
- How important is it that your beneficiaries have a benefit after your death?
Generally provides maximum lifetime income for one (or two people for a Joint Life Only policy). Payments stop at the annuitant's death. For the Joint Life Only option, if one annuitant were to die, the payments continue to the survivor for the rest of his or her life. Payments stop at the death of both annuitants.
Life with Period Certain:
Pays income for one lifetime or a guaranteed period of time (five to 30 years), whichever is longer. If one (or both annuitants for a Joint Life policy) were to live beyond that period, payments would continue for a lifetime. If one (or both for a Joint Life policy) were to die prior to the guaranteed period ending, payments would continue to the beneficiaries for the remainder of the guarantee period.
Life with Cash Refund:
Pays for one lifetime (and the lifetime of one other person if a Joint Life policy). However, this option guarantees that if the annuitant dies (or both of annuitants for a Joint Life policy), the beneficiaries will receive a lump sum equaling the premium less all payments made. For a Joint Life, the policy pays income as long as either annuitant is alive.
Life with Installment Refund
Pays for one lifetime (and the lifetime of one other person if a Joint Life policy). However, this option guarantees that if the annuitant dies (or both annuitants for a Joint Life policy), the beneficiaries will continue to receive the annuity payments until the premium is fully recovered. The Installment Refund provision entitles the beneficiaries to receive the total of the premium less all payments made on a scheduled installment basis.
Life with Percent of Premium Death Benefit
Offers income for one lifetime (and the lifetime of on other person if a Joint Life policy). It also guarantees that when the annuitant dies (or both annuitants for a Joint Life policy), the beneficiaries will receive a death benefit totaling 25% or 50% of the original premium (chosen at policy issue). This alternative pays a lower income for the same premium than one that does not provide a guaranteed death benefit, but it ensures a legacy for the policy owner's heirs.