Annuity For Life
When someone is shopping for an annuity for life, it can mean multiple things based on their understanding of annuities. Usually they are looking for either an immediate annuity or a deferred annuity.
If someone is looking to put money into a product and start to draw income immediately:
They would be looking for an immediate annuity. With an immediate annuity, people give the insurance company money in return for a guaranteed income stream for life. In the past this could be a bad deal for a consumer if they died prior to their life expectancy but now most annuities come with a guaranteed return of premium feature to avoid this problem. The most competitive immediate annuities change on a monthly basis but these companies usually are among the most competitive….. Genworth, The Standard, Lincoln, Equitrust, American Equity and Great American. They commonly have some of the higher immediate annuity payouts
Take warning:
the current interest rate environment is not friendly to immediate annuities. As a result, you will be subject to very low interest payouts currently.
The second meaning of “annuity for life”
Usually means someone is looking for a deferred annuity. In other words, they want to put money in now for a guaranteed payout later. There are many advantages to a deferred annuity two of which are the higher interest rate they earn and the predictability of them.
The best method for a deferred annuity is:
to use a fixed indexed annuity with an income rider. The fixed indexed annuity market was very competitive at one time but it is currently dominated by Security Benefit. If someone wants deferred income they should be using either the Security Benefit Secure Income Annuity or the Security Benefit Total Value Annuity. These products have the highest payouts, end of story. If someone uses a different indexed annuity to produce future income, they are making a mistake. This sounds harsh but it is the reality currently. This could change any day if a different company comes out with a new product or if Security Benefit makes changes to both products.