When it comes to financial planning, life insurance is a crucial component to consider. A life insurance pension plan provides individuals with a sense of security and peace of mind, ensuring that they can enjoy their golden years without financial worries.
So, what exactly is a life insurance pension plan? In simple terms, it is a specialized type of insurance policy that combines the benefits of life insurance and a pension plan. This unique plan offers individuals the opportunity to receive a lump sum amount or regular income during their retirement years.
One of the major benefits of a life insurance pension plan is the protection it provides to your loved ones in case of your untimely demise. The plan ensures that your beneficiaries will receive a predetermined sum of money, which can help them cover their daily expenses, mortgage payments, or even fund their children’s education.
Furthermore, a life insurance pension plan offers various options that individuals can choose from based on their specific needs and financial goals. Some plans provide a fixed income for a specific period, while others may offer a death benefit component or allow for additional contributions to increase the retirement fund.
In conclusion, a life insurance pension plan is a comprehensive financial tool that combines the benefits of life insurance and a pension plan. It not only offers individuals a sense of security during their retirement years but also ensures financial protection for their loved ones. With its flexible options and benefits, this plan is undoubtedly worth considering when planning for your future.
Understanding Life Insurance Pension Plans
Life Insurance Pension Plans are financial products that provide individuals with a combination of life insurance and a pension or retirement savings component. These plans are designed to offer both protection for the policyholder’s beneficiaries in the event of their death and a means of accumulating funds for retirement.
A life insurance pension plan typically involves paying regular premiums to an insurance company over a specified period of time. These premiums are used to fund both the life insurance coverage and the pension component of the plan. The life insurance coverage provides a death benefit that is paid to the policyholder’s beneficiaries upon their passing.
In addition to the life insurance component, the pension aspect of the plan helps individuals accumulate savings for their retirement. These savings can grow over time through investment performance and contributions. The policyholder can choose from various investment options offered by the insurance company, allowing them to tailor their pension plan to their individual risk tolerance and financial goals.
Upon reaching retirement age, the policyholder can start receiving regular income payments from their accumulated pension savings. This income stream can help support their living expenses during retirement, providing a degree of financial security. The amount of income received will depend on factors such as the policyholder’s accumulated savings, investment performance, and chosen payout option.
|Benefits of Life Insurance Pension Plans
|1. Financial Protection: Life insurance provides a death benefit to protect the policyholder’s beneficiaries in the event of their passing.
|2. Retirement Savings: The pension component of the plan allows individuals to accumulate funds for their retirement.
|3. Investment Growth Potential: The ability to choose from different investment options can help grow the pension savings over time.
|4. Flexibility: Policyholders have the flexibility to choose the premium amount, payment frequency, and investment options that suit their needs.
|5. Tax Advantages: Life insurance pension plans may offer tax benefits, such as tax-deferred growth on the pension savings and potential tax-free distributions in retirement.
Overall, life insurance pension plans provide individuals with a comprehensive financial solution that offers both life insurance protection and a means to save for retirement. These plans can help individuals achieve their financial goals and provide peace of mind for themselves and their loved ones.
Importance of Life Insurance Pension Plans
Life insurance pension plans play a crucial role in securing a comfortable retirement. These plans combine the benefits of life insurance and pension to provide financial security for individuals and their loved ones.
A life insurance pension plan ensures that your loved ones receive a lump sum amount or regular income after your death. This helps safeguard their financial well-being, covering expenses such as mortgage payments, children’s education, and daily living costs.
Moreover, life insurance pension plans also serve as a savings tool for retirement. By contributing to the plan regularly, you build up a fund that grows over time, generating returns on your investment. This ensures that you have a steady income stream during your retirement years, helping you maintain the same standard of living and meet any unexpected expenses.
Another significant advantage of life insurance pension plans is the tax benefits they offer. Contributions made towards these plans are often tax-deductible, reducing your taxable income. Additionally, the growth of the plan’s fund is generally tax-free. This means that you can enjoy tax-efficient savings and potentially save a significant amount on taxes.
Life insurance pension plans also provide flexibility and choice. They allow you to choose the contribution amount, payment frequency, and the level of coverage suitable for your needs. You can tailor the plan to align with your financial goals and adjust it as your circumstances change.
In conclusion, life insurance pension plans are essential for ensuring financial security during retirement. They provide a combination of life insurance coverage and pension benefits, offering protection for your loved ones and a reliable income stream for yourself. Don’t underestimate the importance of these plans in your overall financial planning.
Definitions of Life Insurance Pension Plans
A life insurance pension plan is a financial arrangement that provides both insurance coverage and a pension benefit. It combines the benefits of life insurance and a pension plan into one comprehensive package.
The primary purpose of a life insurance pension plan is to provide a source of income or financial support to individuals or their beneficiaries in the event of the policyholder’s death or retirement. It serves as a form of financial protection against the uncertainties of life and provides peace of mind for individuals and their loved ones.
A life insurance pension plan typically requires regular premium payments, which are used to build up a cash value over time. This cash value can be accessed by the policyholder as a source of income during retirement or used to secure loans if needed.
One important aspect of a life insurance pension plan is the death benefit. In the event of the policyholder’s death, a lump sum payment or regular income stream is provided to the designated beneficiaries. This financial support can help cover funeral expenses, ongoing living expenses, or other financial obligations left behind.
Another key feature of a life insurance pension plan is the pension benefit. This is the regular income payments that a policyholder receives after retirement. The amount of the pension benefit is typically determined by factors such as the individual’s age, premium payments, and the accumulated cash value of the policy.
There are different types of life insurance pension plans available, including term life insurance with a pension option, whole life insurance with a pension component, and universal life insurance with a pension option. Each type offers different benefits, premiums, and flexibility to meet the unique needs and goals of individuals.
In conclusion, a life insurance pension plan is a valuable financial product that provides insurance coverage and a pension benefit. It offers financial security, peace of mind, and a source of income during retirement or in the event of the policyholder’s death. It is important for individuals to evaluate their financial needs and goals to determine the most suitable life insurance pension plan for their situation.
What is a Life Insurance Pension Plan?
A life insurance pension plan is a financial plan that combines the benefits of a life insurance policy with those of a pension plan. It provides individuals with the security of life insurance coverage, while also allowing them to save for retirement.
Life insurance pension plans typically require individuals to pay regular premiums, which are used to fund both the life insurance coverage and the pension plan. The premiums are invested by the plan provider, and the returns on the investments are used to generate the retirement income.
One of the main benefits of a life insurance pension plan is the death benefit. If the individual passes away before retirement, their beneficiaries will receive a lump sum payment, which can provide financial security for their loved ones.
In addition to the death benefit, life insurance pension plans also provide individuals with a retirement income. The amount of this income is determined by factors such as the individual’s age, the size of their contributions, and the performance of the plan’s investments.
Benefits of a Life Insurance Pension Plan
There are several benefits to having a life insurance pension plan:
|Financial security: A life insurance pension plan provides individuals with the financial security of life insurance coverage, as well as a retirement income.
|Death benefit: The death benefit of a life insurance pension plan ensures that loved ones are taken care of in the event of the individual’s passing.
|Tax advantages: Contributions to a life insurance pension plan may be tax-deductible, and the investment returns are tax-deferred until withdrawals are made in retirement.
|Control over investments: Life insurance pension plans usually offer a range of investment options, allowing individuals to choose where their money is invested.
|Flexibility: Depending on the plan, individuals may have the option to adjust their premium payments or make additional contributions, providing flexibility to adapt to changing financial circumstances.
A life insurance pension plan is a valuable financial tool that provides individuals with the benefits of both life insurance coverage and a pension plan. It offers financial security and a retirement income, along with various other advantages such as tax benefits and investment options. It is important to carefully consider the terms and conditions of different plans to ensure that it aligns with individual financial goals and needs.
Types of Life Insurance Pension Plans
There are several types of life insurance pension plans that individuals can choose from, depending on their needs and financial goals. These plans provide a combination of life insurance coverage and pension benefits, offering individuals the opportunity to secure their loved ones’ financial future while also saving for retirement.
Here are some common types of life insurance pension plans:
|Type of Plan
|Traditional Life Insurance Pension Plan
|This type of plan provides a death benefit to the policyholder’s beneficiaries in the event of the policyholder’s death. It also offers a pension benefit, which is a regular income stream that the policyholder can receive during retirement.
|Variable Life Insurance Pension Plan
|This plan allows policyholders to invest a portion of their premiums into various investment options such as stocks, bonds, or mutual funds. The policy’s cash value and death benefit can fluctuate based on the performance of the chosen investments.
|Universal Life Insurance Pension Plan
|With this type of plan, policyholders have more flexibility in managing their premiums and death benefit. They can adjust the amount and frequency of their premium payments and also have the option to increase or decrease the death benefit amount.
|Indexed Life Insurance Pension Plan
|Indexed life insurance pension plans offer policyholders the opportunity to earn interest based on the performance of a specific market index, such as the S&P 500. The policy’s cash value and death benefit can increase based on the chosen index’s performance.
Each type of life insurance pension plan has its own advantages and considerations. It is important for individuals to carefully evaluate their financial situation and goals before selecting a plan that best suits their needs. Consulting with a financial advisor can also provide valuable insights and guidance in choosing the right life insurance pension plan.
Benefits of Life Insurance Pension Plans
A life insurance pension plan offers several benefits to policyholders. Here are some of the key advantages:
Financial Security: A life insurance pension plan provides financial security to the policyholder and their dependents. In the event of the policyholder’s death, a designated beneficiary will receive a lump sum or regular payout from the plan, ensuring their financial stability.
Retirement Income: One of the main benefits of a life insurance pension plan is that it provides a source of income during retirement. The policyholder pays regular premiums, which accumulate over time and grow with interest. Upon retirement, the accumulated funds can be withdrawn as a lump sum or used to purchase an annuity, providing a regular income to support the policyholder’s retirement needs.
Tax Benefits: Life insurance pension plans often come with tax advantages. The premiums paid towards the plan may be eligible for tax deductions, reducing the policyholder’s taxable income. Additionally, the growth of the plan’s funds is usually tax-deferred, meaning that the policyholder does not have to pay taxes on the investment earnings until funds are withdrawn.
Flexibility: Life insurance pension plans offer flexibility in terms of contribution amounts and investment options. Policyholders can choose the amount of premiums they wish to pay, based on their financial situation and retirement goals. They can also select investment options that align with their risk tolerance and expected returns, allowing them to tailor the plan to their individual needs.
Protection Against Market Risks: Life insurance pension plans can provide protection against market risks. Some plans offer guarantees on the minimum return on investment, ensuring that the policyholder’s funds are protected in case of market downturns. This can provide peace of mind to the policyholder, knowing that their retirement savings are safeguarded.
Overall, a life insurance pension plan offers a range of benefits, including financial security, retirement income, tax advantages, flexibility, and protection against market risks. It is a comprehensive solution that helps individuals plan for a secure and comfortable retirement.
When it comes to financial security, life insurance and pension plans can provide a safety net for you and your loved ones.
Life insurance is a vital component of financial planning, as it offers protection for your family in the event of your death. Having life insurance ensures that your loved ones will be taken care of financially, even if you are no longer around to provide for them. Life insurance policies typically offer a lump sum payment, known as the death benefit, to the beneficiaries upon the policyholder’s death. This money can be used to cover funeral expenses, pay off debt, or replace lost income.
Pension plans, on the other hand, provide a source of income during retirement. By contributing to a pension plan throughout your working years, you are building a retirement fund that will support you financially once you stop working. Pension plans can be provided by employers or purchased individually, and they typically offer fixed monthly payments to retirees. These payments are often based on factors such as years of service and salary history.
Both life insurance and pension plans are essential tools for achieving financial security. Life insurance protects your loved ones in the event of your death, while pension plans ensure a steady income during retirement. By understanding the benefits and options available in both areas, you can make informed decisions and take the necessary steps towards securing your financial future.
When it comes to life insurance, there are several tax advantages available to policyholders. These advantages can provide significant savings and financial benefits over time.
Tax-Free Death Benefit
One of the main tax advantages of a life insurance policy is the tax-free death benefit. When the insured person passes away, their beneficiaries receive the death benefit payout without having to pay any income tax on the amount received. This can provide financial security for the family and help cover funeral expenses, outstanding debts, or daily living expenses.
Another tax advantage of certain life insurance plans is the ability to accumulate cash value on a tax-deferred basis. This means that any growth in the cash value of the policy is not subject to income tax until it is withdrawn. This can be particularly beneficial for policyholders who use their life insurance policy as a savings or investment tool, as it allows the cash value to grow faster without the tax burden.
Additionally, policyholders can often access the cash value of their life insurance policy through loans or withdrawals, which can be made on a tax-free basis as long as certain conditions are met.
It’s important to note that tax laws vary by jurisdiction, and it’s advisable to consult with a tax professional to understand the specific tax advantages and implications of your life insurance plan.
In conclusion, life insurance plans offer various tax advantages, including a tax-free death benefit and tax-deferred growth. These advantages can help policyholders save money and provide financial security for their loved ones.
When it comes to life insurance, having a comprehensive coverage plan is essential. A life insurance pension plan offers individuals the opportunity to secure their financial future and protect their loved ones in the event of their untimely passing.
Life insurance coverage provides a lump sum payment, known as a death benefit, to the insured’s beneficiaries upon their death. This financial support can help cover funeral expenses, outstanding debts, and provide a source of income for the deceased’s dependents.
Types of Insurance Coverage
There are various types of insurance coverage options available to individuals. Term life insurance provides coverage for a specific period of time, typically between 10 and 30 years. This type of coverage is often chosen by individuals who want temporary protection and have specific financial obligations, such as a mortgage or children’s education expenses.
Whole life insurance, on the other hand, provides coverage for the insured’s entire life. This type of coverage offers not only a death benefit but also builds cash value over time. The cash value can be accessed by the policyholder during their lifetime and used for various purposes, such as supplementing retirement income or paying for unexpected expenses.
Benefits of Insurance Coverage
Having life insurance coverage can bring peace of mind to individuals and their loved ones. Knowing that financial support will be available in the event of one’s passing can alleviate the burden of financial uncertainty during a difficult time.
Additionally, life insurance coverage can provide individuals with the opportunity to leave a legacy for their loved ones. The death benefit can be used to support the insured’s beneficiaries, ensuring they have financial stability and can maintain their standard of living.
In conclusion, life insurance coverage is crucial for individuals who want to protect their loved ones and secure their financial future. Whether you choose a term life insurance plan or opt for the lifelong protection of whole life insurance, having insurance coverage ensures that your loved ones are taken care of in the event of your passing.
Flexibility is an important aspect of an insurance pension plan. It allows individuals to have options and control over their policies and benefits. With insurance pension plans, individuals have the ability to choose the level of coverage they want based on their needs and financial situation.
One of the ways that insurance pension plans offer flexibility is through the option to make changes to the policy. Individuals can adjust the terms and conditions of their policy, such as increasing or decreasing the coverage amount, changing the beneficiaries, or altering the payment schedule. This flexibility allows individuals to adapt their insurance pension plan to their changing circumstances.
Additionally, insurance pension plans often offer investment options, which provide individuals the opportunity to grow their savings. These investment options come with varying degrees of risk and return, allowing individuals to choose the best option based on their risk tolerance and financial goals.
Benefits of Flexibility in Insurance Pension Plans
The flexibility in insurance pension plans offers several benefits:
- Customization: Individuals can customize their insurance pension plans to fit their needs and preferences.
- Adaptability: Flexibility allows individuals to adapt their insurance pension plan to changes in their life circumstances, such as marriage, children, or a change in employment status.
- Control: Having flexibility gives individuals a sense of control over their insurance pension plan, allowing them to make decisions that align with their financial goals and values.
Flexibility and Peace of Mind
The flexibility offered by insurance pension plans gives individuals peace of mind, knowing that they have the ability to adjust their coverage and benefits as needed. It provides reassurance that the insurance pension plan will continue to meet their changing needs throughout their life.
The table below summarizes the flexibility options available in insurance pension plans:
|Individuals can increase or decrease the coverage amount based on their needs and financial situation.
|Individuals can change the beneficiaries of their insurance pension plan at any time.
|Payment Schedule Modifications
|Individuals can adjust the payment schedule, such as changing the frequency or amount of premium payments.
|Insurance pension plans offer various investment options, allowing individuals to choose the best option based on their risk tolerance and financial goals.
In conclusion, the flexibility offered by insurance pension plans empowers individuals to tailor their coverage and benefits to their unique needs and circumstances. It provides a sense of control and peace of mind, knowing that their insurance pension plan can be adjusted as life changes occur.
Options for Life Insurance Pension Plans
Life insurance pension plans provide individuals with valuable financial protection and a source of income during retirement. These plans offer several options to meet the needs and goals of policyholders.
Traditional Pension Plans
Traditional pension plans, also known as defined benefit plans, are offered by employers. These plans guarantee a specific monthly income to retirees based on factors such as salary and years of service. Life insurance can be integrated into these plans to provide additional death benefits to the beneficiaries of the policyholder.
Variable Pension Plans
Variable pension plans allow individuals to invest their pension contributions in a selection of investment options such as stocks, bonds, and mutual funds. The returns on these investments vary based on market performance, providing the potential for higher returns but also higher risks. Life insurance can be included in these plans to ensure a death benefit is provided to beneficiaries regardless of investment performance.
|Life-only Pension Option
|This option provides the policyholder with the maximum monthly income during their lifetime. However, it does not guarantee any death benefits for beneficiaries.
|Joint and Survivor Pension Option
|This option allows the policyholder to receive a reduced monthly income during their lifetime, but it ensures that a spouse or a designated beneficiary continues to receive a portion of the income after the policyholder’s death.
|Lump Sum Payout Option
|This option allows the policyholder to receive a one-time lump sum payment instead of a monthly income. The payout amount is determined based on factors such as age, life expectancy, and the policy’s cash value.
Life insurance pension plans offer flexibility and security for retirees. By understanding the various options available, individuals can choose a plan that aligns with their financial goals and provides peace of mind for themselves and their loved ones.
Choosing the Right Policy
When it comes to choosing the right pension plan insurance policy, there are several factors to consider. Here are some key points to keep in mind:
|1. Coverage Amount:
|Consider the amount of coverage you need based on your financial obligations and goals. Determine how much your loved ones would require to maintain their quality of life in the event of your passing.
|2. Type of Policy:
|There are various types of pension plan insurance policies, such as term life insurance, whole life insurance, and universal life insurance. Each has its own advantages and disadvantages, so evaluate your needs and preferences to determine which type suits you best.
|Consider the amount of premiums you can comfortably afford. Premiums can vary based on factors such as your age, health, and the type of policy you choose. It’s important to find a balance between affordability and sufficient coverage.
|4. Riders and Additional Benefits:
|Some pension plan insurance policies offer riders or additional benefits that you may find beneficial. These can include options such as disability income riders, critical illness riders, or accelerated death benefit riders. Evaluate the available options and determine if any are important to you.
|5. Financial Stability:
|Research the financial stability and reputation of the insurance company before making a decision. It’s important to choose a company that has a strong track record and is able to meet its financial obligations in the long run.
By carefully considering these factors and taking the time to compare different policies, you can make an informed decision and choose the right pension plan insurance policy that meets your needs and provides peace of mind for you and your loved ones.
Premium Payment Options
When it comes to a life insurance pension plan, there are various premium payment options available to policyholders. These options allow individuals to choose the method that works best for their financial situation and preferences.
1. Annual Premium Payment: With this option, policyholders make a single payment each year for their life insurance pension plan. This can be a convenient choice for individuals who have a stable income and prefer to manage their finances on an annual basis.
2. Semi-Annual Premium Payment: Under this option, individuals make two payments per year towards their life insurance pension plan. This option can be suitable for those who want to spread out their premium payments over the course of a year.
Note: Some insurance companies may charge an additional fee for policyholders who choose the semi-annual premium payment option.
3. Quarterly Premium Payment: With this option, policyholders make four payments per year towards their life insurance pension plan. This option can be helpful for individuals who prefer to make regular payments and want to divide their premium into smaller amounts.
Note: Like the semi-annual premium payment option, some insurance companies may charge an extra fee for policyholders who opt for quarterly payments.
4. Monthly Premium Payment: This option allows policyholders to make monthly payments towards their life insurance pension plan. This can be a convenient choice for individuals who want to budget their expenses on a monthly basis.
Note: It’s important to keep in mind that insurance companies may charge administrative fees for policyholders who choose the monthly premium payment option.
Before deciding on a premium payment option for your life insurance pension plan, it’s advisable to carefully evaluate your financial situation and choose the option that aligns with your budget and financial goals.
When it comes to your life insurance or pension plan, you may have the option to add additional riders to enhance your coverage. Riders are add-on features that provide additional benefits to your policy. These riders can be customized to fit your specific needs and can provide extra protection for you and your loved ones.
One common rider option is the disability income rider. This rider provides a monthly income if you become disabled and are unable to work. It can help replace lost income and ensure that you can continue to support yourself and your family during difficult times.
Another popular rider is the critical illness rider. This rider provides a lump sum payment if you are diagnosed with a covered critical illness such as cancer, heart attack, or stroke. This payment can help cover medical expenses or supplement your income while you recover.
Some life insurance and pension plans also offer a long-term care rider. This rider provides coverage for long-term care services such as nursing home care or in-home care in the event that you are unable to perform certain activities of daily living. This rider can help protect your assets and provide you with the care you need as you age.
It’s important to carefully review your options and consider your specific needs when selecting additional riders for your life insurance or pension plan. Each rider may come with its own cost, so you’ll want to weigh the benefits against the added expense. Consulting with a financial advisor or insurance agent can help you make the best decision for your financial future.
In the world of life insurance and pension plans, policy conversion refers to the process of converting a life insurance policy into a pension plan. This option is often available to policyholders who have reached a certain age or have met specific criteria set by the insurance company.
Policy conversion is a valuable option for individuals who are nearing retirement age and would like to transform their life insurance policy into a pension plan. By converting their policy, individuals can secure a stable and reliable source of income during their retirement years.
There are several benefits to policy conversion. Firstly, it allows individuals to take advantage of the accumulated cash value in their life insurance policy. This cash value can be used to provide a lump sum payment or to fund a pension plan that will provide regular payments over a specified period.
Additionally, policy conversion provides individuals with a flexible way to manage their retirement savings. Once the policy is converted into a pension plan, individuals have the option to choose different payout options, such as a life annuity or a joint life annuity with their spouse.
It’s important to note that policy conversion may come with certain costs and restrictions. Individuals should carefully review their policy conversion options and consult with a financial advisor to determine if it is the right choice for their financial situation.
Policy Conversion Options
1. Full Conversion: This option allows individuals to convert their entire life insurance policy into a pension plan. The accumulated cash value in the policy is used to fund the pension plan.
2. Partial Conversion: With this option, individuals can convert a portion of their life insurance policy into a pension plan while keeping the remaining part as a life insurance policy.
Policy conversion is a beneficial option for individuals looking to secure a stable income during their retirement years. By converting their life insurance policy into a pension plan, individuals can tap into the accumulated cash value and enjoy the flexibility of different payout options. It is important to carefully consider the terms and conditions of policy conversion before making a decision.
What is a life insurance pension plan?
A life insurance pension plan is a type of retirement plan that combines the benefits of life insurance coverage with pension payments. It provides a death benefit to the policyholder’s beneficiaries in case of death, as well as regular income payments during retirement.
What are the benefits of a life insurance pension plan?
There are several benefits to having a life insurance pension plan. Firstly, it provides financial security for your loved ones in the event of your death by offering a death benefit. Secondly, it ensures a steady stream of income during retirement, supplementing any other sources of retirement income you may have. Additionally, the premiums paid into the plan are often tax-deductible.
What are the options for life insurance pension plans?
There are various options available for life insurance pension plans. One option is a defined benefit plan, where the employer guarantees a specific monthly pension amount upon retirement. Another option is a defined contribution plan, where the employee contributes a certain percentage of their salary into a retirement account which is then invested. Other options include annuity-based plans, group life insurance plans, and individual life insurance plans combined with a separate retirement account.
How do I choose the right life insurance pension plan?
Choosing the right life insurance pension plan depends on your specific needs and financial goals. Factors to consider include your age, income, retirement goals, risk tolerance, and the financial stability of the insurance company or employer offering the plan. It’s recommended to consult with a financial advisor who can assess your individual situation and help you make an informed decision.
Can I make changes to my life insurance pension plan?
In most cases, it is possible to make changes to your life insurance pension plan. However, the extent of the changes you can make will depend on the specific terms and conditions of your plan. Some changes, such as adjusting the amount of coverage or contributions, may be allowed, while others may be subject to certain restrictions or fees. It’s important to review your plan documents and consult with your plan administrator or insurance company to understand the options available to you.
What is a life insurance pension plan?
A life insurance pension plan is a retirement savings vehicle that combines the benefits of a life insurance policy with a pension plan. It offers financial protection to the policyholder’s beneficiaries in case of death, and also provides a steady income stream during retirement.