With guaranteed annuities you get a contract with an insurance company who agrees to pay you a guaranteed income either for a specific period or for the rest your life in return for a capital sum. With guaranteed annuities, income is paid for the annuitant’s life, but if you build in a guaranteed annuity option then in the event of early death within a guaranteed period, the income is paid for the balance of the period to the beneficiaries. With guaranteed annuities the capital is non-returnable and hence with guaranteed annuity rates the income is relatively high.
Guaranteed Annuity Rates
Guaranteed annuities are not the only form of annuities and one of the first things to consider when researching your guaranteed annuity rates and options is do you qualify for enhanced annuities? Investors that have a relatively high attitude to investment risk may also consider income drawdown. Others with a low to medium attitude to risk that do not feel a guaranteed annuity would be right for them consider with profits annuities.
With guaranteed annuities once you have bought your guaranteed annuity rates they generally cannot be changed. This is why some people choose to have a variable annuity where income can change depending on the underlying performance of the invested fund.