If you are about to retire or have already retired, life annuities may be the best way to invest a lump sum amount of money which has been accumulated through a retirement plan, deferred annuity  or some other type of savings vehicle. Life annuities are important because they can provide financial security and a stream of regular income payments which you cannot outlive.  Your income from annuities will continue till you live or for a specified period of time.

Life annuities are one of the best investment products that you can buy in order to get a secure and better future.  An annuity is basically a contract which exists between the insurance company and an individual.  Under this contract, the individual will be required to give a specified amount of money to the insurance company and the insurance company will pay regular income to the individual for the rest of his life.  The amount that is paid to the individual will depend on a number of factors.  For example, the individual's state of health, age, gender, pension pot, interest rate, type of annuity and annuity rate will determine how much money he can receive from the insurance company.

There are many advantages of purchasing an annuity, but since there are a large number of providers available offering all types of annuity products, it can be quite difficult to choose the right one.

Insurance companies and annuity providers created annuity products so people could also get ways to create income in retirement.  Life annuities are tax deferred and this means that an annuitant will not be required to pay taxes on his savings until he chooses to withdraw or when he starts to receive payouts.  Understanding the different types of life annuities can help an individual make better decisions.

Here are some of the major types of life annuity products available.

Straight Life – for most people, this type of annuity is easy to understand because the aim of having this annuity is to ensure that an individual has enough income after retirement to sustain him for as long as he lives.  When the payout period starts, the individual will receive predetermined payments every month for the rest of his life.  One of the main benefits of having a straight life annuity is that it is cheaper than the other types of annuities.  It is also straight forward.

Substandard Health – this type of annuity product is mostly considered by people who are in a poor state of health.  This type of annuity is expensive because there is a greater financial risk being put on the insurance company.  Since the annuitant is expected to live a much shorter life because of poor health conditions, he will be entitled to receive a higher payout every month.

Joint Life With Last Survivor – this type of annuity is beneficial for people who have dependents.  For example, if you  have a spouse, you can consider investing your money in this type of annuity because if your partner outlives you, she/he will still be able to receive regular payouts from your annuity provider.

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