Reversionary Annuity for Dummies

Hey there! So, a reversionary annuity is a term you might come across when talking about retirement or financial planning. Let's break it down step by step. First off, an annuity is basically a contract between you and an insurance company where you make a lump-sum payment or a series of payments. In return, you get a stream of income in the future. It's like putting money into a savings account, but in this case, you receive regular payments later on instead of just saving the money.

Now, the "reversionary" part comes into play when you want to provide for someone else after you pass away. So, a reversionary annuity is a type of annuity where the payments continue to someone else, like a spouse or a beneficiary, after the annuity owner dies. It's kinda like setting up a way for your loved ones to continue receiving financial support even after you're no longer around. It's a way to ensure that your loved ones are taken care of financially in the future.

So, to sum it up, a reversionary annuity is essentially a way to provide a stream of income to someone you care about after you're gone, through an agreement with an insurance company. It's like setting up a safety net for your loved ones to have financial security even in your absence. It's a way to leave a lasting, positive impact on the people you care about. Hope that helps clarify things a bit!