Risk and Annuities

In a sense, an annuity is the reverse of a life insurance policy. Life insurance insures you against the risk of your dying too soon, but an annuity protects you against the risk of your living too long (which could result in your money running out while you are still alive). In a life insurance contract, there is a risk to the insurance company that the insured person may die earlier than expected; thus requiring the company to pay out money sooner than it planned. In the case of an annuity, the major risk to the insurance company is that the person may live a very long life – requiring more payments than the insurance company expected. Another risk is that the company may not be able to earn as great a return on its investments as planned, and so it may have less money to make payments when they are due. It is wise to buy an annuity only from a financially strong insurance company. Such a company is more likely to be able to pay its obligations. As with life insurance, the risk of annuities is spread over many people who have such contracts. This makes it easier for the insurance company to predict its risk.

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Important Notice: This information is not intended to be a recommendation to purchase an annuity. You should consult with a financial planner to determine if an annuity is a suitable product in your situation. Also, be advised that tax information published at this site is written to support the promotion of annuities. It is based on limited facts and should not be relied upon. You should consult with your own tax and legal advisors for an opinion about what could or should be done in your particular situation.

Monthly Annuity Calculator

This is a monthly annuity calculator. It calculates the amount of monthly income you will receive in return for a specific "Investment" (aka Premium). Premium is the purchase amount you pay to the insurance company. With this calculator you can also find what Premium would be necessary in order to receive a specific monthly income amount. To use the annuity calculator, simply select your age, state, and gender. Enter a dollar amount in only one of the two boxes labeled "Investment" or "Monthly Income." Then, choose an income start date. Click "Calculate" and you will see a table with annuity quotes. Feel free to call 800-872-6684 if you have any questions about annuities or your quotes.

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  • Optional: For a 2-person annuity (joint lives)
  • Enter only one of the following:
    (1) Amount to Invest, or
    (2) Monthly Income You Wish to Receive

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