Life Option

Filed Under » , ,
Dictionary Says

Definition of 'Life Option'

An annuitization-method option for a typical annuity offered by an insurance company with which the annuitant chooses to receive regular income payments from his or her annuity account for life. The insurance company guarantees that the annuitant will receive payments for the rest of his or her life, and structures the payment amounts to provide room for the insurance company's profit margin.
Investopedia Says

Investopedia explains 'Life Option'

With this type of annuitization-method option, the annuitant is essentially converting the lump- sum value of his or her annuity account into a guaranteed income, thus removing the risk that his or her retirement savings will run out before death. In this way, the primary benefit of the life option is peace of mind. However, should the annuitant die relatively soon after starting to receive funds, he or she will not receive the full value of his or her savings (the insurance company gets to keep what's left over).
Search results for

'Life Option'

  • Selecting The Payout On Your Annuity

    http://www.investopedia.com/articles/retirement/05/071105.asp
    ... A 75-year-old man with the life option will receive a higher monthly payout than
    a 65-year-old man because the older man's life expectancy is shorter. ...

  • Life Expectancy: It's More Than Just A Number

    http://www.investopedia.com/articles/insurance/09/life-expectancy-insurance-annuity.asp
    ... If you choose an annuity with a joint life option with survivor benefits, you are
    selecting a contract that will continue to make payments to your surviving ...

  • New Option For Beneficiaries: Reversionary Annuities

    http://www.investopedia.com/articles/retirement/08/survivor-benefit.asp
    ... Therefore, he selected a life-only option from his employer's pension plan
    so he could receive the highest payout - $3,000 a month. ...

  • Intro To Insurance: Life Insurance Considerations | Investopedia

    http://www.investopedia.com/university/insurance/insurance9.asp
    ... The life income option has several payout possibilities: Straight Life Income: Proceeds
    are paid to the beneficiary on the basis of life expectancy. ...

  • Profit From Unwanted Life Policies With Life Settlement

    http://www.investopedia.com/articles/pf/07/unwanted_policies.asp
    ... Life settlements offer an additional option for life insurance policy owners to
    consider when deciding what to do with a policy they no longer want to own. ...

  • Call Option Basics

    http://www.investopedia.com/video/play/call-option
    ... Definitions; Investing; Personal Finance; Active Trading; Forex; Videos /. Call
    Option Basics. ... Prioritizing Debt. Debt affects your finances and your life. ...

  • What's the difference between a regular option and an exotic ...

    http://www.investopedia.com/ask/answers/05/063005.asp
    ... show: Chooser option: An option that gives the investor the right to choose whether
    the option is a put or a call at a certain point during the option's life. ...

  • Callable Bonds: Leading A Double Life

    http://www.investopedia.com/articles/bonds/07/callable_bonds.asp
    ... of two primary components, a normal bond and an embedded call option on interest ...
    the benefit of a higher-than-normal interest rate throughout the life of the ...

  • Understanding Option Pricing

    http://www.investopedia.com/articles/optioninvestor/07/options_beat_market.asp
    ... As a general rule, an option will lose one-third of its value during the first half
    of its life and two-thirds during the second half of its life. ...

  • Stock Option Expiration Cycles

    http://www.investopedia.com/articles/optioninvestor/03/090303.asp
    ... Because option strategies require making modifications during the life of a trade,
    you need to know in what months the options will expire. ...

Related Articles

Bank Rates
Product Today Last Wk
$10K MMA 0.50% 0.51%
MMA 0.45% 0.46%
6 Month CD 0.46% 0.47%
1 Year CD 0.70% 0.75%
5 Year CD 1.46% 1.46%
1 Year Jumbo CD 0.66% 0.67%
Rate data provided by Bankrate
Product Today Last Wk
$30K HELOC 4.59% 4.60%
$30K Home Equity Loan 5.74% 5.77%
$50K Home Equity Loan 5.45% 5.50%
$50K HELOC 4.24% 4.24%
$100K Home Equity Loan 5.41% 5.46%
$100K HELOC 4.13% 4.13%
Rate data provided by Bankrate
Product Today Last Wk
30 Year Fixed 3.80% 3.80%
15 Year Fixed 3.09% 3.11%
1 Year ARM 3.54% 3.53%
30 Year Fixed Jumbo 4.38% 4.38%
5/1 ARM 2.65% 2.69%
3/1 ARM 2.69% 2.69%
Rate data provided by Bankrate
Product Today Last Wk
60 Month Used Car Loan 4.51% 4.51%
48 Month Used Car Loan 4.35% 4.35%
48 Month New Car Loan 3.24% 3.24%
36 Month Used Car Loan 4.34% 4.36%
36 Month New Car Loan 3.11% 3.13%
60 Month New Car Loan 3.35% 3.34%
Rate data provided by Bankrate
Partner Links