HomeAnnuity policy is different. And life Insurance is different. A guidelines is a process of action chosen from different choices with given state of affairs which leads to the conclusion made for present and future. Annuity policies are usually sold by Life Insurance companies.. It is a laid down conditions understanding between the insurance company and the person (policy holder). The benefit of annuity policy is it provides a steady income to the policy holder over a stipulated period of time or until death.. Annuity in general is a policy which assures the holder certain stipulated benefits against payment of instalments, as agreed. The policy holder can opt for a joint holding along with the spouse or another individual.. The premium disbursement to these policies close down on the death of the primary holder of the policy but the income guarantee continues and the recipient of the joint holder receives until he/she is alive. Annuity has a death benefit. It can be more than the money paid. It is also equal to the money paid. Annuity is purchased by one premium payment, or through payment for a period which may last up to 20-25 years, depending on the requirements of the scheme and the policy holder's choice. opted in two ways; the fixed annuity and the inconsistent annuity. In a fixed type of annuity the policy guarantees a fixed amount of return.. This is because the insurers decide the rate of fixed interest to be paid during the term of the policy. Fixed annuity pays less interest. It is at par with bank's interest. But with this escalation the benefit to the policy holder may not cope with the rate of price rise a decade after his policy. The benefit of this policy is it provides a steady income to the policy holder over a stipulated period of time or until death.. However this policy is safe and secured. Variable annuity has risk. It depends on stock market. This is a brave option for interested individuals, but is not favored by many because of the risk factor. Variable annuities provide a variety of fund investment in their portfolio.. For example, share fund, debt fund balanced finance or a cash fund. You invest in the funds. You invest in market value. These policies pay the gathered stock value on the day's NAV. NAV is cost of the asset. This is the actual achievement indicator of a fund. The fund is calculated on a formula. Equity schemes primarily invest in equity shares of companies. If the price rises you get more money. If the prices do not rise you get less. But these schemes risk are higher and thus the returns may vary. Debt fund invest on bonds. It also invest in government securities These schemes are much less volatile than equity schemes. Balanced schemes invest both in equity market and debt market to balance the portfolio. |Blanced scheme invest in debt market. It also invest in equity market}. In a cash fund the money is not put in in the equity or debt market which assures the policy holder the guarantee of their wealth, which is free from any risk. The money may not grow here. It will also not come down.
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