Sunday, June 03, 2007

Annuity for a young person

Hi Mr Tan,

I have been reading your blog and appreciate your valuable advice on financial planning.

Will an insurance company accept a person aged 40 years old for taking up a life annuity product using cash? Can you recommend any good product?

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REPLY:

At the younger ages, I usually advise people to take the fixed term annuity or annuity certain. For example, you can take a fixed term annuity for 20 or 30 years.

The insurance company is uncertain about the mortality rates over a long period, and may not quote attractive rates due to this reason.

If you are really keen on the life annuity, I think that NTUC Income will be able to quote the annuity rate for a person at aged 40.

Can you tell me why you wish to have this type of product?

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