The annuity implies that someone must pay a periodic payment to another individual, until one of the two parties dies.
The annuity is a contract that obligates one party to pay a payment periodically to the other, until one of the individuals participating in the contract dies. In this way, only the death of one of the parties will imply the termination of the contract.
Income is a notion with various uses. This can be the income of an individual or a company, the profits that something generates, or the amounts paid to a landlord.
Lifetime , on the other hand, is what extends from the moment it is obtained until the moment of death . Something lifelong, therefore, lasts a lifetime .
Pensions and annuities
The annuity can have a third party as beneficiary . A woman, for example, can collect a pension for life upon the death of her husband. In this case, the pension represents a life annuity: every month, until she dies, the woman will receive a certain amount of money .
The disability pension received by a worker who suffered a specific work accident is also constituted as a life annuity. The money that you will receive periodically until your death represents compensation or help for this disabled person who, due to the accident , can no longer work and receive a salary for his or her activity.
Pensions and retirements are examples of annuities.
The retirements
Some insurers and pension companies offer an annuity to their clients. This income implies that the person, after investing an initial capital and then making certain contributions, will obtain a periodic income for the rest of their life.
When it comes to retirement , it is possible to distinguish between five types of paid annuity, which are listed below:
- To be collected during the life of the insured person : in this case, the mutual member determines how much he or she wishes to contribute and then receives the income once a month during the last years of his or her life . Although it does not offer the rescue option, it is the modality that provides the highest amount of all. It is indicated for those individuals who have the possibility of parting with a portion of their assets, who do not have heirs or who have them and plan to give them the rest of it.
- With minimum collection period : the mutualist defines the period in which he wishes to collect the income and if he dies before the end, the benefit is transferred to the beneficiaries he has chosen. The maximum term is 25 years. This type of annuity is ideal for those who are dependent on other people and want to ensure that they do not lack financial income once they are no longer there.
- With reversion in favor of a third party : similar to the first modality, the mutualist collects the income periodically, but establishes a percentage (ranging from 50% to 100%) that a beneficiary will collect after his death. It is very common in couples and marriages.
- With partial return : in addition to collecting the income, the insured or their beneficiaries have the possibility of recovering the capital contributed on the condition that at least one year has passed since the beginning of the contribution and transferring 2% of it annually. This modality is usually used by those who want to be able to count on a part of their savings to face potential unforeseen events.
- With full refund : the mutual member has the right to recover all the capital contributed once one year of payment has passed, in the same way that his beneficiaries can do so if the first one dies (in this case, an increase of 2% is offered). .