What are the Different Types of Annuity Plans & their Benefits?

Know the Annuity, what is Annuity meaning, and how does it work?

An annuity is a type of investment plan, and annuity meaning is that it is a long-term investment, which is useful after retirement. Your purchase expenses are changed into recurring costs that can last with the Annuity. 

Insurance companies mostly sell annuity plans, and under these plans, the investor can invest in pieces or lump sums.

The Diversity of Annuities

  • Instant annuity plans – Immediate annuity plans have no accumulation phase and begin functioning immediately after the vesting period; this is derived from the annuity meaning. 
  • Deferred annuity – Under these pension plans, the annuity starts after a certain date; we can generally divide it into two phases which are as follows-
  • First is the Accumulation phase – Under this stage, you start investing and depositing cash in it from the same date you paid the premium for the first time. 
  • Next is the Vested Stage – This is the stage or date you start receiving policy benefits in the form of pension.

Options that are given in Annuity:

After investing in the Annuity, how long the investor wants to receive the pension depends on the investor.

The following options are given to the investor according to the distribution of the investment amount – 

  • Life annuity –

In this investment, the investor gets a pension from the commencement of his retirement until the investor is alive.

  • Life Annuity With Yield Of Amount –

It is similar to a life annuity because a pension is also provided to the investor until he is alive.

But its main thing is that after the investor’s death, the amount invested by him is returned to his nominee.

  • Life Annuity through Joint Life, Last survivor –

Under this option, as long as the investor is alive, he will continue to get the pension, and after his death, this pension will be provided continuously to the investor’s spouse till he is alive. This plan is the best and most important for married people.

  • Life Annuity with Joint Life & Last-survivor Through Return Of Amount –

With This option, as long as the depositor is alive, he will endure getting the pension,

After the investor’s death, this pension will be provided continuously till the spouse of the investor is alive.

After this, the amount will be returned to the nominee. This scheme is best and important for married couples. This is one of the best annuity plans because it helps you survive after your retirement or lack of money.


  • Annuity For Guaranteed Time –

In this option type, the investor can decide the limit of taking pension for a fixed period like- 5, 10, 15, and 20 years. Under this plan, if the investor dies during the pension period, then in such a situation, the nominee will continue to get his pension money.

For example, if the investor chooses the option of 15 years and dies within ten years, then the nominee selected by the investor will continue to get the pension for the next five years. 

In this way, the investor can choose the option in the Annuity as per his requirement.

And now you get the best annuity meaning after knowing all the information given above.

There is an age limit for annuities?

The minimum age of someone purchasing a separate annuity is 30 yrs. The extreme age for buying an annuity is 100 yrs.