Eläkevakuuden

Eläkevakuuden, often translated as pension insurance or annuity, is a financial product designed to provide a stream of income during retirement. It is essentially a contract between an individual and an insurance company where the individual pays premiums, either as a lump sum or over time, and in return, the insurance company agrees to pay a regular income to the individual upon reaching a specified retirement age. These payments can be for a fixed period or for the rest of the annuitant's life, offering a way to manage longevity risk.

There are various types of eläkevakuuden. Fixed annuities guarantee a specific rate of return and a predictable payout. Variable annuities, on the other hand, link their performance to underlying investment options, offering the potential for higher returns but also carrying investment risk. Indexed annuities combine features of both, with returns tied to a market index, but often with limitations on upside potential and downside protection. The tax treatment of eläkevakuuden can vary by jurisdiction, with many offering tax-deferred growth until withdrawals are made in retirement. This feature makes them a popular tool for retirement savings and income planning. It is important for individuals to understand the terms, fees, and risks associated with any eläkevakuuden product before purchasing.