Can You Buy an Annuity for Your Parents?
Yes, you can buy an annuity for your parents. However, there are specific conditions to be aware of:
- Ownership and Annuitant: Your parents must be the annuity’s owners and annuitants. This means they will control the policy and receive the income from it.
- Beneficiaries: You can be named as a beneficiary. This ensures you receive the remaining annuity benefits after your parents pass away.
- Avoiding Naming Yourself as Owner: Do not name yourself the annuity owner. If you are the owner, the death benefit will not be available to any beneficiaries until after death.
- Contract Signing: Your parents will need to sign the annuity contract. This is a legal requirement as they are the ones entering into the agreement.
- Consult a Financial Advisor: It’s advisable to consult a financial advisor to understand the specific terms, conditions, and suitability of the annuity for your parents’ needs.
Related Reading: Who sells the best annuities?
Considerations When Buying Annuity for Parents
|Must be in parents’ names.
|Moderate to High
|You can be named as a beneficiary.
|Parents need to sign the contract.
|Seek professional advice for suitability.
Purchasing an annuity for your parents can be a thoughtful way to ensure their financial stability in retirement. Remember, they need to be the owners and annuitants, and it’s crucial to understand the annuity terms clearly. Consulting with a financial advisor can be invaluable in this process. This guide aims to provide clarity and assistance in making an informed decision.
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