Sentences with phrase «mortality credits as»

Which means that the annuity payment you receive includes not just investment gains and the return of your original investment, but mortality credits as well.

So in practical terms how do mortality credits as well as an annuity's guarantee of a steady lifetime payment translate into an edge over simply investing your money and carefully drawing it down?

Not exact matches

Because in addition to interest and return of a portion of your principal, each annuity payment effectively contains an extra little amount known as a «mortality credit» — essentially, money transferred from annuity owners who die early to those who live long lives.

So an annuity payment includes not just investment gains and the return of your original investment, but this additional «mortality credit» income as well.

Mortality credits aren't available to you when you invest as an individual, which means the only way for you to get the same level of income an annuity offers is to invest more aggressively.

So when setting annuity payments, insurance company actuaries are able to include what are know in insurance circles as «mortality credits,» essentially money that would have gone to annuity owners who die early but that's instead transferred to those who live longer.

If you have good reason to believe you'll die before you reach life expectancy, an annuity isn't a good choice as you'll be the one providing mortality credits to those annuity owners who go own to live long lives.

What gives the annuity its edge is that each annuity payment you receive contains not just interest and return of a portion of your principal but an extra «return» known as a mortality credit.

These payment enhancements are known as «mortality credits.»

As Birenbaum explains in a YouTube video, how much you receive from an annuity is very much age - related and the later you start, the higher the mortality credits (which you get from pooling longevity risk with others).

Since these products do not offer any retirement alpha (i.e. longevity credits, otherwise known as mortality credits) a topic that I highlighted via this blog a few months ago: Increased Life Expectancy Leads to a Decrease in Payout Rates, it will take a much larger portion of your funds to generate the same amount of income.

Avoiding Tax Trap in the Exchange The very common reason why many policyholders would opt to change their old annuity policy and old life insurance policy in exchange to a new annuity policy and new annuity policy is mainly because a new policy is most likely will perform much better compared to the old policies since nowadays there are already improvements when it comes to mortality which will provide a lower insurance cost, a lesser administration expense on the policy which will provide lower cost, improvements in the said underwriting with lower cost, improvements in the health of the insured which will trigger lower cost, improvements in interest crediting which will perhaps provide higher rates of interest as well as the interest linked in an index and to some cases, a worsened health which may cause higher than the usual annuity payments.

Deferral of Social Security income, say from age 62 to age 70, has a similar effect on payouts as in a deferred income annuity (another name for longevity insurance); mortality credits can accrue during this deferral period, say from 62 to 70.

Direct - recognition, current assumption policies, such as universal life, «unbundle» the policy elements and explicitly show mortality and expense charges and interest credits.

If the difference between the current mortality rates and the maximum rates is small, the company has little room to use higher mortality charges as a means of reducing the effective rate credited to cash values.