Annuities may be more lucrative because of their tax deferral features and the increased rate of growth that it gives to your savings, but a lot of investors prefer to use annuities as a security for their old age income and to ensure financial strength and support for the spouse. Annuities offer an element of security and protection to people without a steady income, particularly, who have reached the retirement phase. A lot of companies offer special features in their annuities that may be immensely useful to the senior citizens. Let’s discuss these here and know more about annuity death benefits.

If you are specifically looking at an annuity to ensure a fixed or regular source of income and a financial protection, you can look for features such as no surrender fee, no sales cost, nursing home waiver, and so on. These features differ across annuities and companies that offer them. An annuity that promises to return the initial premium you had paid, when you surrender the contract, may help pay any tax. An annuity that comes with a nursing home waiver reduces the surrender charges to zero if you fall sick and need to surrender the annuity to pay for your nursing home bills, at any time during the annuity period.

Most annuities offer death benefit provision in certain levels. This ensures that if you die before the annuity period is over, the benefits of the annuity will pass over to your heirs or individuals you nominate. Different annuities may have different death benefit assurance, and you will have to check that they are offering something that you want. If you purchase a fixed annuity for life, which doesn’t promise a death benefit, you may lose the remaining part of your annuity to the insurance company, if you die early. On the other hand, if you buy a life annuity with guaranteed terms, it offer more financial protection and allow you to assign a beneficiary to whom the remaining value of the annuity will be transferred if you die before the annuity period is over. A problem with this form of annuity may be the tax burden! The lump sum payment to the beneficiary may result in a significant payout to tax, reducing the value of the money transfer. You can overrule this by purchasing a joint life annuity contract, partnering with your spouse. This ensures a specified payment at regular intervals to the spouse, even after your death, without creating a tax burden.