What Is A Longevity Annuity?


Longevity annuities (aka. Deferred Income Annuities) are contracts between an individual and an insurance company. The insured party deposits a premium payment into the contract today and in exchange, receives a guaranteed income stream for life beginning at a pre-determined future date.

The income stream will be based upon the premium deposited, the age of the contract owner, their life expectancy and the date/time frame in which the income will be paid. Market fluctuations will not impact the income payments received. In some cases, contract owners will be permitted to make additional contributions to their annuities. These additional payments will impact the income received. (Article continues below calculator)

Longevity Annuities vs. Immediate Annuities

In most cases, the income payout will be significantly higher with a longevity annuity than with an immediate annuity. There are two commonplace situations future retirees consider with regard to these 2 annuity options. The first option involves placing capital into a longevity annuity, deferring payments for 20 years. The second situation involves waiting until the retiree’s later years to deposit funds into an immediate annuity. If the retiree invested $100,000 in either scenario, they would receive more income from placing premium into a longevity annuity and waiting 20 year to begin receiving it.

Longevity Annuity Optional Benefits

In most cases, premiums deposited into longevity annuities are forfeited in exchange for future income. One of the concerns many retirees have with this annuity product is how their asset or income stream will pass to their named beneficiaries. To address this concern, many annuities offer an optional death benefit rider. This rider provides the option for either return of premium of remaining income stream to named beneficiaries if the contract owner dies within a specified period of time.

Another optional rider offers inflation protection, increasing the guaranteed income payments by a fixed percentage to protect the retiree’s ongoing earning power.

Optional riders are available for an additional fee, which reduces the income payments received from premiums deposited.

Longevity annuities offer investors guaranteed income for life in addition to higher payouts than other contract types. Longevity annuities are strong options for those who are concerned that they may outlive their assets.

Deferred Income Annuity Calculator

This is a deferred income annuity ("longevity annuity") calculator. It instantly calculates the amount of guaranteed future income you receive by purchasing an annuity today. The amount you invest (aka Premium) is the single lump sum you pay to the insurance today. With this calculator you can also solve for the amount of premium necessary to receive a future monthly income amount. To use the calculator, simply choose your age, gender, state of residence, and when you'd like your income to start. Then enter a dollar amount in only one of the two boxes labeled "Investment" (premium) or "Monthly Income." Click "Calculate" and you will see a table with annuity quotes. Continue through the different steps to receive by email our most competitive quotes from the top six insurance companies offering deferred income annuities. Feel free to call 800-872-6684 if you have any questions about these 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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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.