Life Annuity

A life annuity is a financial contract in the form of an insurance product according to which a seller (issuer) — typically a financial institution such as a life insurance company — makes a series of future payments to a buyer (annuitant) in exchange for the immediate payment of a lump sum (single-payment annuity) or a series of regular payments (regular-payment annuity), prior to the onset of the annuity.

The payment stream from the issuer to the annuitant has an unknown duration based principally upon the date of death of the annuitant. At this point the contract will terminate and the remainder of the fund accumulated is forfeited unless there are other annuitants or beneficiaries in the contract. Thus a life annuity is a form of longevity insurance, where the uncertainty of an individual's lifespan is transferred from the individual to the insurer, which reduces its own uncertainty by pooling many clients. Annuities can be purchased to provide an income during retirement, or originate from a structured settlement of a personal injury lawsuit.

Read more about Life AnnuityHistory, Phases of An Annuity, Decision To Defer or Not, Types of Life Annuity, Future of Annuities, European Court of Justice Ruling

Other articles related to "life annuity, annuity, life":

Annuity (European Financial Arrangements) - Immediate Annuity - Life Annuity - Life Annuity Options
... Although this will reduce the available payments, an annuity can be arranged to continue until the death of the last survivor of two or more people ... The annuity paid to the spouse is called a reversionary annuity or survivorship annuity ... to select the higher payout option on their life only and purchase a life insurance policy that would pay income to the survivor ...
Actuarial Present Value - Life Annuity
... The actuarial present value of a life annuity of 1 per year paid continuously can be found in two ways This is similar to the method for a life insurance policy ... the total present value random variable of an annuity of 1 per year, issued to a life aged x, paid continuously as long as the person is alive, and is given by where T=T(x) is the future lifetime ... In practice life annuities are not paid continuously ...
Annuity (European Financial Arrangements) - Actuarial Considerations - Payment Options For Immediate Annuities
... In technical language an annuity is said to be payable for an assigned status, this being a general word chosen in preference to such words as "time", "term ... The magnitude of the annuity is the sum to be paid (and received) in the course of each year. 100 is to be received each year by a person, he is said to have "an annuity of £100." If the payments are made half-yearly, it is sometimes said that he has "a half-yearly ...
Life Annuity - European Court of Justice Ruling
... March 2011 a European Court of Justice ruling was made that prevents annuity providers from using gender to set different premiums for men and women ... Annuity rates for men are generally higher than those for women because they have shorter life expectancies ... The change means that either annuity rates for men will fall or annuity rates for women will rise ...

Famous quotes containing the word life:

    Oh! what a poor thing is human life in its best enjoyments!—subjected to imaginary evils when it has no real ones to disturb it! and that can be made as effectually unhappy by its apprehensions of remote contingencies as if it was struggling with the pains of a present distress!
    Samuel Richardson (1689–1761)