What Is a Flexible Annuity?

by Joanne Cichetti; Updated September 26, 2017
Mature woman pointing to bill held by mature man at desk, close-up

Flexible annuity is a type of annuity that pays the individual an income for life and allows him/her to choose the method of investment as well as the amount of money to be received every month. This annuity can also be used for providing the money to the individual’s beneficiaries and dependents.

Investment Option

The annuity provider gives more than one investment option to the annuity holder, which gives a control to the individual in choosing whichever investment plan suits him.

Income Option

The amount of income generated through the annuity is variable, which means the annuity holder can choose how much he wishes to receive on a periodic basis.

Joint-Life Annuity

Flexible annuity gives the option of providing financial security to beneficiaries by selecting a joint-life annuity.

Income Fluctuation

The value of the investment can rise and fall, which means the receivable income will also be subjected to fluctuation.

Disadvantages

Since the investment value fluctuates, there is always a risk that you receive a lower amount in the years to come, compared to the amount you started off with. Consequently, upon withdrawals of huge amounts, the income may not be able to sustain.

About the Author

Joanne Cichetti has written articles and Web content professionally since 2009, focusing primarily on health and lifestyle. In order to further pursue her writing career professionally, Cichetti inducted herself in the Long Ridge Writers Group, and she looks forward to having a novel published under their guidance.

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