What is it equal to the annuity of life?

The direct life of the annuity is an insurance contract that pays a number of fixed payments throughout the life of the owner or Annitant. The amount of payments is determined by the amount of payment by purchasing and age Annitant at the time the payments start. The frequency of payments that may be annual, half -year, quarterly or monthly can also be taken into account. In the United States it is necessary to buy direct life annuity from life insurance companies.

The contract payments will continue until the death of Annitant, no matter how long Annitant has lived. If Annitant buys an annuity of life at the age of 65 and lives at 102, payments are made in this 37 -year period. If Annitant dies at the age of 67, payments are made for only two years.

The amount of each payment is determined at the time of the annuity, so if Annitant lives longer than the Mathematical Tables would propose, he can raise much more money than if he simply invested money and made regular selections. Conversely, if the annuitant dies prematurely, they mayto be received significantly smaller than the original purchase payment. There is no advantage of death with direct life annuity, so no recipient is needed.

Annuity of direct life is often used to ensure the flow of income when retirement. Annuitants can make periodic payments to annuity during their working life, and after retirement, Annuitant can also purchase a new retirement agreement, retirement income or a flat -rate pension from the employer. The advantage of using an annuity in retirement is that payments continue until the person lives. There is no risk that the pensioner survives her assets.

It is important to realize that Payments stop when Annitant dies, so there is no inheritance after Annuitant's death to ensure the needs of a dependent husband. It is possible to buy a common direct life of the annuity that pays income a couple until the second axesThey will not die.

The direct life of the annuity is usually a firm annuity, with payments remaining the same during the contract. There are also variable annuity in which payments differ depending on the performance of mutual funds held in the contract. Since the purpose of the annuity of direct life is to provide a guaranteed stream of income for the rest of the life of the annuitant, variable annuity is rarely used.