Ageing is a natural process; it is inevitable. You would have to stop working at some point, either because your employer wants you to stop working because of old age or your health does not permit you from working. However, even after you stop working, your expenses won’t stop; you still must manage your bills and other expenses. 

Do you have enough savings to help you live a comfortable life and maintain your usual lifestyle after retirement? When you grow old, you must be able to enjoy the second innings of your life rather than endure it. This is where annuity plays an important role. It is a type of insurance cover that assures regular income during your post-retirement years. 

When you start working, your immediate priority would be meeting your family’s needs and improving your lifestyle. However, it is vital that you set aside a part of your income towards your retirement so that you can accumulate a sizeable corpus that allows you to live an equally good life when you hang your boots. And the best way to build a corpus is to start investing in an annuity plan from a young age. 

Types of annuities

There are different types of annuity plans in the market. Some of the most popular ones are discussed below:

• Life annuity

In these plans, the insurers pay the annuity amount at a specific interval as you choose. It can be monthly, quarterly, or yearly until your demise. 

• Joint life annuity

In joint annuity plans, the insurers pay the annuity until your spouse is alive. 

• Joint annuity with return of purchase

These annuities are paid until you, or your spouse is alive. After both of you pass away, the insurer pays the amount you invest to the nominee. 

• Annuity payable for a specific period

In such plans, the insurer transfers the annuity pays for a guaranteed period even after your demise. The annuity payment stops either after your death or after completing the guaranteed period, whichever is later. 

If you are wondering if you should choose a single annuity or joint annuity, let us see which is better. 

When is single annuity a better choice?

In single annuity plans, the insurer pays the annuity until your demise or until the end of the guaranteed payment period. You can choose this annuity, if:

• Your spouse has invested in a separate annuity plan of their own
• You have sufficient joint-life annuity together
• Your annuity plan offers you a permanent life cover

Apart from the factor mentioned above, another important factor to consider while choosing a single annuity is whether your spouse has sufficient financial back-up or savings to survive on their own without getting a portion of your annuity income. But, if your spouse does not have adequate financial support, you can opt for a joint-life annuity plan. 

When is a joint annuity a better choice?

In a joint annuity plan, the insurer pays the annuity to you until your demise, and after you pass away, your spouse receives the amount until their demise. This arrangement lets you have peace of mind knowing that your loved one’s financial future is secured even when you are not around. 

Final Word

Both single annuity and joint annuity have pros, and what you choose should depend on your financial condition. If your spouse is entirely dependent on you for financial support, it is better to choose a joint annuity. If your spouse has another annuity, you can select a single annuity plan.