Answer Book question
A contract with an insurer: you pay a lump sum, and they pay you a fixed amount every month for life (or a fixed period). It is the only product that guarantees you cannot outlive your income. The price of that guarantee is a rate that looks low and money that is largely locked.
A contract with an insurer: you pay a lump sum, and they pay you a fixed amount every month for life (or a fixed period). It is the only product that guarantees you cannot outlive your income. The price of that guarantee is a rate that looks low and money that is largely locked.
A retiree pays ₹20 lakh for an immediate annuity. He receives about ₹11,000 a month for life, whatever happens to markets or rates. He cannot get the ₹20 lakh back. If he dies at 70, the insurer keeps the difference unless he chose a return-of-purchase-price option, which pays a lower monthly amount.
An annuity transfers longevity risk to the insurer. Options: life only, joint life, return of purchase price, fixed period. Each option lowers the monthly payout. Annuity income is taxable as income under current rules.
Annuity rate offered vs. FD rates Option chosen and its effect on payout Inflation. most annuities are flat Tax treatment How much of the corpus to annuitise
Annuitising everything and then needing a lump sum for surgery.
NPS subscribers must annuitise a portion on exit; the choice of annuity provider and option matters and can be compared.
₹20 lakh: life annuity ≈ ₹11,000/month; with return of purchase price ≈ ₹10,000/month; joint life with return ≈ ₹9,500/month. Indicative; rates vary.
A person with ample corpus, good health cover and children nearby may prefer an SWP for flexibility and inheritance.
Compare rates from several insurers Annuitise a floor amount, not everything Keep liquidity elsewhere
Should I buy an annuity? Annuity or FD. what is the difference? What does "return of purchase price" mean in an annuity?
Senior-citizen services
India Post / SCSS rules · IRDAI annuity product guidance · RBI deposit insurance (DICGC) limits · Kerala Social Security Mission and Social Justice Department for pension schemes Rates, limits and whether you may qualify change. Confirm with the official source. Ask Kerala Rising: Send us your parents' rough monthly expenses, their income sources and what lump sum exists. We will help you see whether it holds up. and what to organise before there is an emergency. WhatsApp +1 443 595 9000 · keralarising.com Kerala Rising › Seniors › Retirement · Retirement 6
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