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Things That Affect Your Annuity Income

June 18, 2018
An annuity income is an annuity contract that is designed to start paying income as soon as the policy is initiated. Once funded, an income annuity is annuitized immediately, although the underlying income units may be in either fixed or variable investments. As such, the income payments may fluctuate over time.
There are a couple of things that affect your annuity income:
  • Current Interest rates

    If interest rates are high at the time of buying annuity, your annuity payments will be higher than it would be if the interests were low. This is because the company predicts that it can earn more by investing your money. 

  • The amount you deposit

    The more amount you deposit, the higher will be your annuity income.

  • Age

    The older you are when you buy the annuity, the higher your annuity payments will be. That's because you're not expected to live as long.

  • Gender

    Women get less money than men of the same age because they are expected to live longer.

  • The length of the time for receiving payments

    You choose the number of years you receive payments with a term-certain annuity. The shorter the term, the higher the payments. If you have a life annuity, you can arrange for your annuity payments to continue to your spouse, your dependent children, or your estate after you die. The longer you want payments to continue after your death, the less you get each month while you're alive.

  • Additional options

    If the annuity plan only covers you, then you get a higher income. If you add option of joint or survivor option, the income reduces. 

  • Medical condition

    For people with serious medical condition, their annuity is higher since their life expectancy is low.

    The biggest two factors that decide your annuity income are the interest rates and life expectancy. Other factors also play a role but these are the two key factors that are considered.

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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We at HDFC Life are committed to offer innovative products and services that enable individuals live a ‘Life of Pride’. For over two decades we have been providing life insurance plans - protection, pension, savings, investment, annuity and health.