Asking yourself such questions can lead you to your best options with an annuity. For example, if you wish to use the annuity to provide income for your spouse someday, then you would consider a plan that does in fact provide for that person. You might consider a joint annuity, a plan called "10 years certain, with refund," or you might decide on taking out single annuities, one for you and one for your spouse.

On the other hand, if you have no dependents, and are over 65, you may decide on a straight-life annuity that pays you the highest income for as long as you live. In this case there would be no need to leave any funds behind. After your death the insurance company would stop all payments. You would receive the highest income possible for the rest of your life, but there would be nothing for beneficiaries.

If you wish to provide for beneficiaries, you should consider annuities "with refund," or "ten, 15 (or any number) years certain." Each plan has special features.

"With refund" means that at the death of the policyholder, the unused portion of the premium paid is refunded to the beneficiary in a lump sum. The amount of the payment is calculated by subtracting the amount of income that was paid out from the original premium. After the final payout, the account is closed.

"Ten years certain" means the income is paid for a minimum of ten years. If the annuity owner dies after receiving only payments for three years, his or her beneficiary would receive the income for another seven years. The number of years is written into the contract at the time the annuity is bought. Thus, the purchaser can buy an annuity with an option of "ten years certain," "15 years certain," "25 years certain," or whatever he or she wishes.

Joint annuities work in the same way regarding payments. Assuming a ten-year certain contract-if one of the owners dies after receiving payments for three years, the other owner, or beneficiary, will receive payments for the remainder of the contract.

How Has The Swiss
Annuity Performed?
How much profit can be made with a Swiss annuity? Over the past decade, the increasing value of the Swiss franc alone puts you ahead of the U.S. inflation rate. When you add in the 4% to 5% annual return you earn each year in interest and profit sharing, you see that the Swiss franc is a super-conservative investment with a strong potential for delivering a higher yield due to the historical strength of the Swiss franc.

As noted, the best method for growing Swiss francs during the past 30 years was to place them in a Swiss annuity. Inside the annuity, money grows without any stock or bond market risk in a guaranteed, tax-advantaged account. This is entirely legal and is fully approved by the U.S. government.

A Swiss annuity gives you a twofold return: (1) the interest and dividends ("profit sharing," as the Swiss put it) paid into the annuity and (2) the appreciation of the Swiss franc. (Note: There is no guarantee, of course, that the Swiss franc will continue to grow in value against the dollar. Americans who want to invest in Swiss annuities without taking the currency risk can make and keep their investment in U.S. dollars.)

Keep these factors in mind: 1) Declining interest rates come with decreased inflation. Decreased Swiss inflation means the Swiss franc will appreciate, which means a greater return convertible in your own national currency; 2) Rising interest rates produce a higher investment yield for the insurance company and this can mean higher dividend payments to the policy owner.
This combination of annuity interest, profit sharing, and the appreciation of the Swiss franc would have provided an average annual return of nearly 9% since 1971. Almost one-half of that growth came from the appreciation of the Swiss franc against the U.S. paper dollar. Albert Einstein once said that the greatest mathematical principle in the universe was the power of compound interest.