Mortality credits and period certain
are two important concepts not to overlook when discussing the features of a
life annuity product. Many people aren’t
familiar with these essential terms.
Consider this: Doug and Helen walk into
a bank. Doug is 20 years old and Helen is 70
years old. They both tell the bank officer that they have $100,000 to invest
and want to take the most interest they can get for the rest of their
lifetimes.
Because of her age, Helen has a
distinct advantage in her number of choices. Helen could simply put
$100,000 in a bank CD and take the current interest rate of 2% on a five-year
CD.
