Insurance companies offer a variety of annuity settlement (or "payout") options. Contracts typically provide for payments either for:

1. The rest of the owner's life;


2. As long as the owner and spouse are alive; or


3. A period certain, such as 10 years.

During the distribution phase, annuity payments are usually monthly.

Following is a review of common settlement options and their advantages and disadvantages:

Life

With a straight life annuity, owners receive benefit payments for as long as they live. This contract does not provide for a beneficiary. Payments stop when the owner dies; however, the owner cannot outlive benefit payments because the payments continue for as long as he or she lives. Since this contract pays nothing after the annuitant's death (and if the owner dies, the heirs may not recover the initial deposit), it requires a lower premium than other types of life annuities with the same benefit amount. Of the life annuity options available, straight life can produce the largest benefit payment for the owner's principal. People who need a high retirement income and do not have any dependents may be most likely to purchase a straight life annuity.

Back to Top | Next

Ohio National is not affiliated with, nor does it endorse or sponsor, any particular prospecting, marketing or selling system.

129