I am too young to really consider annuities at the moment but am interested in learning more about them as a potential guaranateed income stream to supplement social security in retirement.
I know when somebody buys health insurance, your health influences what kind of premium you pay. Unhealthy people pay more because it is expected the insurance will pay out more benefits for them.
Does this fact work in reverse for annuities? Seems like those people with a lot of health issues would be ideal candidate for the companies selling the annuities because you are more likely to die sooner and thus they pay out fewer dollars? You would think you would get a better "return" (paid more per month) if you were more likely to die sooner.
I know when somebody buys health insurance, your health influences what kind of premium you pay. Unhealthy people pay more because it is expected the insurance will pay out more benefits for them.
Does this fact work in reverse for annuities? Seems like those people with a lot of health issues would be ideal candidate for the companies selling the annuities because you are more likely to die sooner and thus they pay out fewer dollars? You would think you would get a better "return" (paid more per month) if you were more likely to die sooner.