The Reversionary Annuity
I have in recent weeks
began to call the product by the generic name – a
reversionary annuity. In my explanation I have called the
product a life insurance product that becomes an annuity at
claim time. I have also begun using the following to explain
its benefits. It provides the client/beneficiary with
the best attributes of a Term Insurance Policy; lower cost and
greater affordability. The best attributes of a Permanent
Insurance Policy; cannot outlive the coverage. The best
attributes of an Annuity; because of the security of a
lifetime income stream.
Nick J, Androlewicz, LUTCF
February 18, 1999
What is the problem?
- Life insurance can be very expensive in the senior age group,
and many times the premium can create a financial burden on
your current life-style. The cost of term insurance will
also rise until it is too burdensome to continue. Term
insurance may solve the problem for the short-term, but income
needs remain permanent. If you’re using term insurance
to help replace income loss, consider using this new form of
insurance called a Reversionary Annuity.
What is it?
- It’s a new product concept, a life insurance policy
conditioned on the survival of the beneficiary beyond the life
of the insured and payable to the beneficiary at a
pre-arranged amount per month/year as long as the beneficiary
is alive.
What are its advantages?
- It offers a viable alternative to traditional forms of
insurance. The program offers a much larger benefit for
the same premium dollar (in the form of monthly income).
The reduction in premium outlay versus other traditional life
insurance can be significant (unequaled affordability).
What are its uses?
- The most common use is in providing income replacement of
pension income loss due to the death of the primary income
earner, it is also a supplement to the loss of social security
benefits.
Your Survivor's Future
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