Can You Buy an Annuity for Your Parents?

Shawn Plummer

CEO, The Annuity Expert

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:

  1. 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.
  2. Beneficiaries: You can be named as a beneficiary. This ensures you receive the remaining annuity benefits after your parents pass away.
  3. 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.
  4. 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.
  5. 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?

Buying Annuities For Your Parents

Considerations When Buying Annuity for Parents

FactorImportanceDescription
OwnershipHighMust be in parents’ names.
BeneficiaryModerate to HighYou can be named as a beneficiary.
Contractual PartyHighParents need to sign the contract.
Financial AdviceHighly RecommendedSeek professional advice for suitability.

Conclusion

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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Shawn Plummer

CEO, The Annuity Expert

Shawn Plummer is a licensed financial professional, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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